Local shares are set to open flat ahead of the hype-fuelled initial public offering of Medibank.
What you need2know:
• SPI futures down 5 pts at 5349
• AUD at 86.11 US cents, 101.84 Japanese yen, 69.25 Euro cents and 54.85 British pence
• On Wall St S&P 500 +0.3%, Dow flat, Nasdaq +0.9%
• In Europe, Euro Stoxx 50 +06%, FTSE -0.3%, CAC +0.5%, DAX +0.5%
• Spot gold down 0.3% to $US1197.93 an ounce
• Iron ore inches 0.2% higher to $US70.42 per metric tonne
• Brent oil down 0.8% to $US79.75 per barrel
What’s on today
Australia speech by Reserve Bank deputy governor Philip Lowe; US economic growth, home prices, consumer confidence: Euro zone OECD economic outlook.
Stocks to watch
Medibank IPO.
Australia’s biggest infrastructure investor, IFM Investors, has signalled it’s serious about Victoria’s soon-to-be privatised Port of Melbourne, appointing investment banks to advise on a potential bid.
Deutsche Bank has a “hold” recommendation on Myer and a $1.80 a share price target.
UBS has a “buy” on Sonic Healthcare though it has pared its 12-month price target to $20 a share from $20.70 previously.
Currencies
The US dollar approached a 4-1/2-year high against a basket of currencies as traders speculated that overseas central banks would further ease monetary policies to help their economies, even though it would erode their currencies.
The euro added to gains against the greenback after data showed growth in the US services sector fell short of forecasts. Earlier a report indicated German business sentiment rebounded in November after six straight declines.
The yen dropped to almost a seven- year low versus the US dollar as central banks worldwide add to monetary stimulus, damping demand for low-yielding haven assets such as Japan’s.
Commodities
CME Group, the world’s largest futures market operator, will start trading iron ore with 58 per cent content from next month, it said in a statement.
Nickel rose to a session high of $US16,770 a tonne, its highest level in more than six weeks, benefiting from expectations of a scarcity of ore. Nickel ended at $US16,650 a tonne, up 0.12 per cent.
Russia’s Uralkali, the world’s biggest potash producer, said on Monday it was not discussing a full or partial resumption of work yet at the Solikamsk-2 mine, halted last week after an accident.
United States
US stocks are higher in afternoon trade, on the back of multiple merger deals and hopes that China will take further monetary policy action. Telecom stocks are containing gains on the Dow.
Best Buy and Urban Outfitters are higher, days ahead of the biggest shopping weekend of the year in the US. It kicks off with Black Friday.
Conflicting signals from economic data are making it hard for the U.S. Federal Reserve to use a well-known rule of thumb to set monetary policy, according to a San Francisco Fed study. The so-called Taylor rule, named after its author Stanford University professor John Taylor, generates an estimate for the appropriate level of interest rates based on the rate of inflation and the level of economic slack.
Europe
European shares closed mixed to start the week but optimism prevails.
"We're still very bullish on European assets just because of the ECB policy that is going to trump everything else," said Patrick Armstrong, chief investment officer at Plurimi Investment Managers.
The Euro Stoxx 50 index trimmed its gains in late trade after ECB governing council member Jens Weidmann, who is president of Germany's Bundesbank, said additional stimulus measures by Europe’s central bank would encounter legal hurdles.
Britain’s BT Group has been approached by O2 owner Telefonica and the parents of O2’s bigger rival EE to discuss competing multibillion-pound deals to create a powerhouse in fixed-line broadband, mobile and TV.
What happened yesterday
The Australian sharemarket has started the week with its best session in a month, as some beaten down iron ore miners posted their strongest day in years, following an unexpected interest rate cut in China late on Friday.
The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each added 1.1 per cent on Monday, to 5361.8 points and 5349 points respectively. The rally followed a horror week in which the benchmark index wiped out 2.75 per cent, falling below the level where it started the year.
