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The SPI is pointing to a positive start for the Australian share market despite a negative lead from Wall Street. US stocks reversed gains on Monday to close in the red as concerns about global growth and geopolitical tensions offset optimism over last week’s strong US jobs report. The local market will get back to action today after yesterday’s light trade due to the Labour Day public holiday in many states across Australia. Today’s major economic headline will be the RBA’s interest decision and statement in the afternoon amid expectations the central bank will keep the key cash rate on hold.
Global markets
Wall Street started the week in the red: The Dow Jones Industrial Average dipped 0.1 per cent to close at 16,992, the S&P 500 slipped 0.2 per cent to close at 1,965 and the Nasdaq eased 0.5 per cent to close at 4,455.
European markets rose into the new week: London's FTSE 100 gained 0.6 per cent, France's CAC 40 gained 0.06 per cent and Germany's DAX gained 0.2 per cent.
Asian markets moved higher on Monday: Japan’s Nikkei climbed 1.2 per cent, Hong Kong’s Hang Seng jumped 1.1 per cent, and China’s Shanghai Composite remains on public holiday.
The Australian share market bounced off the day’s lows after solid job advertisements numbers but still started the week 0.5 per cent lower: The S&P/ASX 200 index dropped 25 points on Monday to close at 5,293. On the futures market the SPI is 20 points higher.
Currencies
After trading at four-year lows yesterday against the greenback the Australian dollar at 7:20am was buying $US0.8763, 54.51 Pence Sterling, 95.3 Yen and 69.26 Euro cents.
Economic news due out today
Reserve Bank of Australia: October board meeting and interest rate decision
Dun and Bradstreet: Business expectations survey
Australian Industry Group-Housing Industry Association: Performance of construction index (PCI) for September
Australian Bureau of Statistics: Overseas arrivals and departure data for August
ANZ Banking Group (ASX:ANZ)-Roy Morgan: Weekly consumer confidence survey
RBA interest rate expectations
Commonwealth Bank of Australia’s (ASX:CBA) broking arm Commsec says its ‘London-to-a-brick’ that interest rates will today be left unchanged at 2.5 per cent for a 14th month. Commsec does note however that the accompanying statement is likely to be somewhat different from last month. While Commsec doesn’t believe the RBA will change its interest rate stability rhetoric it has highlighted recent changes in domestic and global economic conditions reflected in commodity prices and the Aussie dollar. Shares in Commonwealth Bank of Australia dipped 0.63 per cent to close at $76.17 on Monday.
National Australia Bank (ASX:NAB) has stated it is ‘universally expected the RBA will again leave the cash rate unchanged’ at record lows at today’s meeting. NAB expects the central bank to maintain its outlook for a period of stability in interest rates. However, the bank says it will be looking out for any references to the RBA’s concerns about certain fast-moving sections of the housing market, especially in Sydney and Melbourne. Shares in National Australia Bank slipped 0.79 per cent to close at $32.71 on Monday.
Ex-dividends
Fonterra Shareholders' Fund (ASX:FSF) paying a 3.8753 cent unfranked dividend
Gowing Bros. Limited (ASX:GOW) paying a 6 cent fully franked dividend
M2 Group Limited (ASX:MTU) paying a 14.5 cent fully franked dividend
Premier Investments (ASX:PMV) paying a 20 cent fully franked dividend
WAM Capital Limited (ASX:WAM) paying a 6.5 cent fully franked dividend
Commodities
Gold has risen $14.40 to $US1,207 an ounce for the December contract on Comex.
Silver has lifted $0.40 to $17.22 for December.
Copper has added $0.04 to $3.04 a pound.
Oil has gained $0.60 to $US90.34 a barrel for November light crude in New York.
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