Morning traders.
Overnight round-up and day ahead:
Stocks look set for a subdued start after economic worries capped US stock gains and lowered key commodities.
The ASX 200 index futures contract eased 11 points or almost 0.2 per cent to 6592 despite a late uptick in US stocks.
The S&P 500 laboured near break-even for much of the session before spiking nine points or 0.29 per cent in the last half-hour to a new record. The Dow put on 69 points or 0.26 per cent and the Nasdaq 18 points or 0.22 per cent.
Euphoria over the resumption of trade talks with China was dampened by threats from the White House to impose tariffs on $4 billion worth of European imports, escalating a dispute over subsidies for airplane manufacturers. Also dampening risk appetite was a string of soft manufacturing reports from around the globe. Monthly measures from the US, China and Europe all showed factory activity slowed last month, triggering sharp declines in demand-driven commodities such as oil and copper.
Texas crude skidded $2.84 or 4.8 per cent to settle at $US56.25 a barrel on the New York Mercantile Exchange. The fall came despite confirmation that OPEC producers will curb production at current levels until next March.
The weekend trade bump for industrial metals gave way to demand fears. Copper fell 1.1 per cent to a two-week low after Chinese manufacturing activity unexpectedly contracted and US activity declined for a third straight month. Elsewhere on the London Metal Exchange, aluminium shed 0.7 per cent, lead 0.6 per cent, nickel 2.1 percent and tin 6.3 per cent. Zinc gained 0.7 per cent.
Not all was gloom in the commodity space. Iron ore remained well supported by the surging Chinese steel price. Spot ore at Tianjin in China Import rose $5 or 4.1 per cent to $US126.20 a dry ton. That helped lift BHP's US listing 0.91 per cent and its UK listing 0.81 per cent. Rio Tinto advanced 1.51 per cent in the US and 1.24 per cent in the UK.
Gains in the big two iron ore miners helped keep the local market above water yesterday, offsetting a hit to financials as investors fretted that yesterday's RBA rate cut will make it harder for the banks to retain margins. The ASX 200 ended the day just five points or 0.1 per cent ahead.
The dollar lost ground yesterday after the Reserve Bank cut the cash rate by 25 basis points to a record low 1 per cent. However, the Aussie bounced a third of a cent overnight to 69.9 US cents as the US dollar took a hit from the weak factory data.
Gold regained most of Monday's sharp fall, supported by the weaker greenback and concerns for the global economic outlook.August gold rebounded $18.70 or 1.4 per cent to settle at US$1,408 an ounce and had lately extended its rally to $1,421.50. On Monday, prices plunged 1.7 per cent - the precious metal's heaviest drop in a year - as traders rotated into risk assets.
The economic calendar remains busy over the next 24 hours. Trade and building reports are due here this morning. China is due to release a report on services activity. And Wall Street has trade, services and jobs reports due tonight.
Breakfast:
Today we're going old-school. It's either that or choosing between National Chocolate Wafer Day or National Fried Clam Day. We have to draw the line somewhere.
