A directionless night for most commodities and overseas equities has Australian shares facing a subdued start to today's trade.
The September SPI 200 futures contract ended the night session three points or 0.1% stronger at 4351 as US stocks clawed back early losses.
Trading volumes and volatility were low again as the S&P 500 finished the night unchanged. The Dow finished near the top of a tight 46-point trading range, four points or 0.03% in the red. The Nasdaq fell 0.01%.
With no major economic news and the corporate earnings season winding down, attention in the US returned to Europe where the European Central Bank hosed down speculation about its plans to tackle the region's debt crisis and German's central bank reiterated its opposition to becoming the continent's lender of last resort. An ECB spokesman said the central bank had not yet decided whether to buy debt issued by individual governments, a plan strongly opposed by Germany's Bundesbank. In its monthly report issued overnight, the Bundesbank said buying sovereign debt would "entail significant stability risks".
"We're at a pretty formidable technical resistance here," the chief investment strategist at Commonfund in the US told Bloomberg. "The Bundesbank does have a hard problem with [ECB bond buying]. Germany is being put in the position as being the lender of last resort in Europe."
European markets gave up early gains as the evidence of continuing divisions between the ECB and Bundesbank emerged. Germany's DAX eased 0.1%, France's CAC 0.22% and Britain's FTSE 0.17%.
Oil retreated for the first session in five but trimmed its losses in recent trade. West Texas crude for September delivery was recently down six cents or 0.1% at US$95.95 a barrel after earlier falling as low as $95.02.
Gold edged to its best settlement since mid-June as traders await news from central banks in the weeks ahead. Gold for December delivery was lately up $3.20 or 0.2% at US$1,622.60 an ounce.
Industrial metals were mixed, with copper crimped by weekend news of a rise in Chinese house prices that limits the government's ability to stimulate the economy. In London, copper retreated 1.1%, aluminium 1.1%, nickel 0.5% and zinc 0.1%. Lead rallied 0.7% and tin less than 0.1%. US copper for September delivery was recently down five cents or 1.4% at US$3.37 a pound.
TRADING THEMES TODAY
WAITING FOR CUES: A pretty dull night overseas, with minimal movement in either direction. The easy gains are likely behind us and now the market is waiting for the central banks to deliver - or not. On the plus side, there's no evidence of significant profit-taking yet, so optimism remains strong. Perhaps a little too strong in the circumstances. Our market has the minutes from the last Reserve Bank meeting to examine at 11.30am EST, but they're unlikely to contain anything market-moving.
ECONOMIC NEWS: The minutes from the last RBA monetary policy meeting are released at 11.30am EST. Another exceptionally light 24 hours for overseas action offers little except a speech by Federal Reserve Bank of Atlanta President Dennis Lockhart.
