Weakness among the big banks steered local shares lower this morning as caution crept in ahead of tonight's U.S. jobs reports.
At lunchtime the ASX 200 was down 18 points or 0.4% at 4547. Most sectors were trading little changed but financials fell 1% on a morning when construction activity contracted and the Reserve Bank hinted that interest rates are likely to stay on hold for the immediate future.
The RBA's quarterly monetary policy statement was little changed from the May statement and predicted that inflation will hold around current levels until next year. Market commentators said the steady outlook suggested rates are likely to stay on hold until circumstances change.
Activity in the construction sector contracted for a second month as tighter bank lending and weak housing demand took their toll. The AIG/HIA performance of construction index fell 3.1 index points to 43.3 last month. Readings below 50 indicate contraction.
Housing Industry Association chief economist Harley Dale said the result was "universally negative" and called for policy reform to encourage house building. "This further highlights the need for stable interest rates and the urgent need for further policy reform to reduce the obstacles to boosting Australia's new housing supply," he told Fairfax websites.
Asian markets recorded modest retreats. Japan's Nikkei was off 0.31%, Shanghai 0.69% and Hong Kong's Hang Seng 0.24%. Dow futures were recently at -5.
Crude oil futures eased 8 cents this morning to $82.07 a barrel. The spot gold price continued to crab sideways, recently down another 30 cents at $1,194.50 an ounce. The dollar was little changed, buying 91.45 U.S. cents.
A frustrating morning of near-misses here, with nearly every pullback reversing just before my target entry price. The exceptions were NUF, bought for some exposure to the charging agricultural market, and more recently WTF for any intraday recovery.
