Local shares are poised to edge higher at the open ahead of the latest RBA's musings and some key data on China's economy.
What you need2know:
• SPI futures up 11 pts at 5317
• AUD at 88.00 US cents, 93.90 Japanese yen, 68.63 Euro cents and 54.36 British pence
• S&P 500 +0.9%, Dow 0.1%, Nasdaq +1.4%
• In Europe, Euro Stoxx 50 -1.2%, FTSE -0.7%, CAC -1%, DAX -1.5%
• Spot gold up 0.6% to $US1246.11 an ounce
• Iron ore adds 1% to $US81.60 per metric tonne
• Brent oil down 0.9% to $US85.43 per barrel
What’s on today
Australia Reserve Bank board minutes, speech by RBA deputy governor Phillip Lowe, ANZ-Roy Morgan weekly consumer confidence survey, Australian Bureau of Statistics (ABS) International merchandise imports for September; China monthly spending, production and investment data, GDP; US existing home sales.
Stocks to watch
Qantas Alan Joyce at new business suite, Sydney; Newcrest Mining production report; Southern Cross Austereo, Bradken annual meetings.
Cabcharge Australia has rejected a confidential $500 million bid for its under-pressure taxi payments business.
Bank of America Merrill Lynch has reiterated a “buy” recommendation on Tabcorp with a price objective of $4.54 a share with first quarter 2015 trading way ahead of expectations.
Commonwealth Bank has moved from “neutral” to “overweight” on Newcrest Mining with a price target change to $12.28 from $10.10 a share.
Currencies
The Australian dollar seems to be caught in the extreme volatility that is expected to continue over the short term, with the overall market bias appearing to be short Aussie dollar (and AUD crosses). “We’ve seen some big and often choppy movements, perhaps exaggerated by thin liquidity conditions, but nonetheless these markets are not for the weak at heart,” said Stephen Innes, senior trader at OANDA Asia Pacific.
Major currencies are trading in tight ranges with investors facing a vacuum of data and modest price changes in global markets. “The US dollar had a really great run against its counterparts over the last two months,” said John Doyle, director of markets at Washington, D.C-based Tempus, adding that he still looks for dollar strength in the coming months and next year.
Commodities
Copper fell to levels near a six-month low touched in the previous session, weighed down by uncertainty over China's economic growth, while nickel sunk to the lowest level in seven months.
Copper mine production is forecast to increase by 6.2 per cent in 2015 compared with only 0.9 per cent this year, Vanessa Davidson at consultants CRU told a seminar during LME Week. Davidson said she expected LME cash prices to average $US6760 next year, which was close to the consensus forecast in the LME poll of $US6724.
Shell Midstream Partners LP, a master limited partnership formed by Royal Dutch Shell, said it expected its initial public offering of common units to be priced at $US19-$US21 per unit, valuing it at up to $US1.42 billion.
United States
US stocks were mixed in late trade, as the S&P 500 and Nasdaq advanced, but the Dow fell as quarterly results from IBM disappointed. Apple was up 2 per cent ahead of the release of its latest financials after the closing bell.
The $US108 billion Fidelity Contrafund continues to have a big appetite for Facebook’s stock, adding to its position in the social media company during the third quarter and praising its mobile ad revenue growth and “visionary management”.
IBM shares slumped more than 7 per cent in late trade after the company’s third-quarter earnings fell well short of Wall Street expectations.
Europe
European stocks fell on Monday, trimming lofty gains made in the previous session, with SAP’s profit warning hitting shares in the tech sector. Shares in the German business software maker plunged 6.6 per cent after it cut its outlook for full-year operating profit.
Germany’s central bank said the local economy, the largest in the euro zone, risks coming dangerously close to recession, forecasting little or no growth in the second half of the year.
Shares in Alpha Bank surged more than 13 per cent after hedge fund manager David Einhorn recommended betting on Greek banks and against French debt.
What happened yesterday
The Australian sharemarket extended last week’s rally on Monday, led upward by the big banks as investors search for value following the recent sharp dive in stocks. Asian and US markets were also on the rise.
The S&P/ASX 200 index rose 47.7 points, or 0.9pc, to 5319.4 on Monday.
