Local shares are poised to open higher, lifted by Wall Street's advance on Friday, though gains could be checked as investors await Tuesday's RBA rate decision.
What you need2know
SPI futures up 34pts to 5833
AUD at 78.29 US cents, 94.13 Japanese yen, 69.96 Euro cents and 51.67 British pence
On Wall St, S&P 500 +1.1%, Dow +1%, Nasdaq +1.3%
In London, FTSE 100 +0.4%, CAC +0.1%, DAX, +0.2%
Iron ore slips 1.7% to $US56.18 per tonne
Spot gold down $US5.91 or 0.5% to $US1178.46 an ounce
Brent crude down 32 US cents or 0.5% to $US66.46 a barrel
What's on today
Australia ACCI business expectations, inflation, ANZ job ads, residential housing approvals, ASX Westpac first-half results, Stockland third quarter market update; US factory orders.
Stocks in focus
Deutsche Bank expects Woolworths to report another soft quarter on Wednesday.
Transurban is a "buy" at UBS with a 12-month price target of $10.10 a share.
UBS upgrades ALS Ltd to "neutral" from "sell" with a price target at $5.50, up from $4.45 previously.
RBC Capital Markets has an "outperform" on Sydney Airport and a price target at $5.50 a share. "SYD is a major beneficiary of the recent China-Australia bilateral air rights agreement."
Currencies
Stan Shamu, market strategist at IG says Tuesday's RBA policy meeting is likely to be a key point for the AUD and domestic equities this year and will set the tone for how we wrap up the first half.
Citi says that the Aussie dollar is now arguably further above fair value given the fall in key commodity prices over the last three months. "Indeed, at close to US80¢ it is well above where it was when the Reserve Bank of Australia cut rates in February. We believe that in real terms the currency is also overvalued."
Inflation in the US seems to have "firmed," San Francisco Fed president John Williams said Friday, and hopefully is headed back up to the Fed's 2% target.
Commodities
Oil prices eased off 2015 highs on Friday after Iraq said its crude oil exports hit a record in April, and on pressure from a stronger greenback. Both Brent and US crude settled well above intraday lows, supported by data showing another slip in drilling rig activity and news of a shut gasoline-making unit in Venezuela.
Citi forecasts that the recent recovery in iron-ore prices is unlikely to last. Citi expects the price to drop below $US45 a tonne over Q2 and Q3 as major producers continue to maintain output at high levels.
ANZ says there is a distinct lack of a consensus view on gold right now, and the next move in the gold price rests largely on the evolution of US data – and how it impacts the USD.
United States
US stocks bounced back sharply on Friday as investors snapped up beaten-down shares in the healthcare and technology sectors, and as data gave further signs of a pickup in the economy.
Apple provided the biggest boost to the major indexes, jumping 3% to $US128.95 in its biggest daily percentage gain since January. The stock lost 2.7% on Thursday.
LinkedIn, Twitter and Yelp all notched their biggest weekly percentage declines since their debuts. LinkedIn, which reported results late Thursday, dropped 18.6% to $US205.21.
For the week, the Dow was down 0.3%, the S&P 500 was down 0.5% and the Nasdaq was down 1.7%.
Consumer sentiment jumped and vehicle sales for GM and Ford were stronger-than-expected in April, while manufacturing expansion in the month held steady at near a two-year low.
Europe
With the exception of London, Europe's major markets were closed for the May Day holiday on Friday.
In London, a rally in Lloyds Banking Group and commodity producers pushed up UK stocks for a second day. The FTSE 100 Index gained 0.4% to 6985.95. That pared the gauge's loss to 1.2% for the week. While the benchmark measure rose for a third time in four months in April, stock volatility climbed to its highest level since January before next week's general election.
What happened Friday
Local stocks snapped a heavy three-day losing streak on Friday thanks to a rally in mining stocks and some respite for the banks. The ASX 200 rose 0.4 for the day, but it shed 2 per cent on the week, to 5814.4. The market lost 1.7pc in April.
