30-point ASX gain forecast

The Australian share market is likely to open 30 points higher. Photo / AFP

The Australian share market is likely to open 30 points higher after a belated positive reaction in the US and Europe to the latest stimulus package announced by the European Central Bank.

US shares closed up 1.6 per cent while European markets rose 3.3 per cent on average on Friday.

AMP Capital's chief economist Shane Oliver says while share markets initially reacted poorly to Thursday's ECB announcement - particularly news that interest rates probably won't fall any lower - by Friday they were more upbeat.

"So you saw quite a strong rebound and consequently the ASX 200 futures contract rose 42 points, or 0.8 per cent, suggesting a pretty strong gain tomorrow (Monday)," Dr Oliver said."I expect we'll see a rise in the range of 30 points."

He noted there was some soft data out of China on Saturday concerning retail sales and industrial production, which could dampen otherwise greater gains.

Much of the focus this week will be on Wednesday's Federal Reserve meeting in the US.

The general expectation is that the Fed won't raise interest rates - money markets suggest there's just a six per cent chance of a hike - and will express greater caution.

"They might dampen their expectations for higher interest rates, but they'll still signal that rate hikes are on track for some point through the course of the year," Dr Oliver said.

"It's a balancing act for the Fed because on the one hand they don't want to spook the markets and say things are too shaky, we aren't going to raise rate at all, but by the same token they don't want to sound too aggressive."

The Bank of Japan meets on Tuesday and almost certainly won't change interest rates but could introduce more quantitative easing.

Analysts will be also watching on Tuesday for anything new in the minutes from the latest RBA meeting.

Of most interest in Australia will be the ABS labour force figures for February due out on Thursday.

A gain of about 10,000 jobs is expected, leaving the unemployment rate at six per cent, Dr Oliver said.

- AAP