Metals, Hayne fallout could stress ASX

While positive in global geopolitical terms, the promise of an easing of tensions on the Korean peninsula isn't likely to have an extended market impact.

In a shortened week – with the ASX closed on Wednesday for Anzac Day – the local focus will be on AMP and the rest of Australia's financial services industry.

Revelations from the Hayne commission made last week a horror one for the sector. AMP has been left in tatters; it has shed more than 20 per cent from March 8. AMP is moving to protect its chairman Catherine Brenner from calls for her resignation.

Also likely to dent sentiment as the week begins is a retracing of recent advances in aluminium, copper, nickel and iron ore.

Strategists are generally positive on the outlook for commodities as the global economy accelerates toward its peak for this cycle, though they say some prices have overshot near term.

Aluminium, for one, surged more than 30 per cent in the wake of the latest raft of US sanctions on Russia including aluminium producer Rusal, stoking supply worries.

TD Securities said aluminium, now in "overbought territory", could be in for "a technically inspired move lower to $US2360 a tonne". It slipped 0.6 per cent to $US2469 a tonne on the London Metal Exchange on Friday.

Nickel also hit multi-year highs last week and it, too, could see its price backtrack in the days ahead. It fell 1.6 per cent in London on Friday.

The surge in commodity prices has renewed the debate about the outlook for inflation and Australia's all-important consumer price index report for the first quarter, set to be released on Tuesday, is the key data point this week.

NAB is expecting a rise between 0.4 per cent and 0.5 per cent quarter over quarter, or 1.9 per cent year on year. For core inflation, NAB expects 0.5 per cent quarter on quarter for the trimmed mean and 0.4 per cent quarter on quarter for the weighted median.

"For headline inflation, [the first quarter] is often boosted by seasonal price increases," NAB economist Kaixin Owyong wrote in a week-ahead note, reflecting start of the calendar year increases in health, school and utility prices.

Ms Owyong said an outcome of around 0.4-0.5 per cent quarter over quarter for core inflation "doesn't give the RBA any reason to lift rates early, and is likely to leave the bank in its current 'wait and watch' setting".

"Given the backdrop of a strengthening global and Australian economy, and an unemployment rate forecast to decline, any downside surprise to core inflation is more likely to delay RBA interest rate hikes, rather than be a signpost for a potential further interest rate cut," Ms Owyong added.

Australian investors also will continue to watch the US corporate earnings season which will gather pace this week – about one-third of the S&P 500's members are scheduled to report in the next five days – with a particular focus on technology shares.

Reporting this week are Facebook, Alphabet, Amazon, Microsoft as well as Twitter. Apple, which saw its shares drop last week on concerns that global smartphone sales have perhaps peaked – according to the International Monetary Fund, reports on May 1. The iPhone maker's shares tumbled 7 per cent over the final three days of last week.

Timothy Moore writes the daily Before the Bell column. Based in Vancouver, Tim is an online business editor and reports on monetary policy, equities, commodities and currencies. Tim worked at Bloomberg for more than 12 years in Canada and Australia before joining The Australian Financial Review in 2005.