Local shares appear set for a flat open as concerns about the situation in eastern Ukraine offset bets that the European Central Bank would agree on new measures this week to bolster growth.
What you need2know:
• SPI futures down 5 pts at 5604
• AUD at 93.30 US cents, 97.33 Japanese yen, 71.07 Euro cents and 56.19 British pence.
• Wall St closed for the Labor Day holiday
• In Europe, Euro Stoxx 50 +0.1%, FTSE +0.1%, CAC -0.03%, DAX +0.1%
• Iron ore slips 0.9% to $US87.10 per metric tonne
• Spot gold flat at $US1287.44 an ounce
• Brent oil down 0.4% to $US102.79 per barrel
What’s on today
Australia building approvals, current account balance, net exports, Reserve Bank Board Meeting on rates; US ISM manufacturing index, construction spending.
Stocks to watch
Deutsche Bank has kept its “buy” rating on UGL, with a 12-month target price of $8.21 a share given its current cheap valuation, low gearing, pending capital return and potential for large contracts wins.
Morningstar has a “reduce” recommendation on Cabcharge Australia and a $3.90 fair value share price expectation.
Macquarie Group’s banking and financial services team is the frontrunner to acquire ING Direct’s non-branded mortgage book, sources have told The AFR's Street Talk column.
Currencies
The euro has hit a year-low versus the US dollar, as investors added to bets against the single currency before the European Central Bank’s monthly policy meeting this week
“There are many reasons to continue selling the euro,” said Lutz Karpowitz, currency strategist at Commerzbank. “First of all, the escalating situation in Ukraine, which might lead to further sanctions, thus increasing the risk of the euro zone economy being affected by the crisis. Even more important is the ECB rate meeting.”
Commodities
Nickel dipped after touching three-week lows on Friday, ending the day down 0.3 per cent at $US18,745 a tonne. "While the nickel rally has stalled ... and the timing of the next move up is difficult to discern, we advise investors to be patient," analyst Barry Ehrlich at Citi said in a note. "Our commodity team's 2015 nickel forecast of $US24,125 per tonne remains realistic, we believe."
“Crude prices appear to have stabilised,” said Michael Wittner, oil analyst at French bank Societe Generale. “However, there are significant factors that will prevent a near-term price recovery,” he added. “Exports of Libyan light sweet crude are growing, and increasing volumes of crude are being placed in storage, which will maintain downward pressure."
United States
Wall St is closed on Monday in the US for the Labor Day holiday.
Europe
European shares edged higher to close near a recent one-month peak on Monday, with merger and acquisition speculation about British broadcaster ITV helping media stocks and Novartis leading drugmakers.
Novartis, up 4.3 per cent, was the top gainer on the FTSEurofirst 300 index on news a new medicine from the company could replace drugs that have been central to treating heart disease for a quarter of century
Data showed factory activity across the euro zone cooled in August as the conflict between Russia and Ukraine took its toll. The PMI survey for Germany, Russia’s biggest trade partner in the European Union, fell to an 11-month low, while the index for France fell further below the 50 mark that separates expansion from contraction.
What happened yesterday
Australia’s sharemarket has started the week with modest gains amid expectations that interest rates will stay lower for longer.
High dividend paying stocks helped lift the benchmark S&P/ASX 200 Index 3.9 points, or 0.07 per cent, to 5629.8 points. The broader All Ordinaries Index, meanwhile, added 4.7 points, or 0.08 per cent, to close at 5629.3 points.
