Local shares are set to open lower as momentum faded in both Europe and on Wall Street though major benchmarkets hover near record highs.
What you need2know:
• SPI futures slid 19 points to 5610
• AUD at 93.36 US cents, 97.00 Japanese yen, 70.76 Euro cents and 56.33 British pence
• On Wall St, S&P 500 flat, Dow +0.1%, Nasdaq flat
• In Europe, Euro Stoxx 50 -0.1%, FTSE +0.1%, CAC +0.04%, DAX -0.2%
• Spot gold up 0.1% to $US1282.90 an ounce
• Iron ore falls 0.7% to $US88.20 per metric tonne.
• Brent oil up 0.1% at $US102.67 per barrel
What’s on today
Australia business investment, HIA new home sales, private capex and credit; China industrial profits; UK Lloyds business barometer; Eurozone consumer, economic and industrial confidence; US economic growth.
Stocks to watch
Earnings from Abacus Property, Adelaide Brighton, Atlas Iron, Billabong, Independence Group, Nine Entertainment, Paladin Energy, Perpetual, Qantas Airways, Reece Australia, Ramsay Health Care.
Deutsche Bank has downgraded its “buy” rating on Federation Centres to “hold” with a 12-month target price of $2.65.
The following stocks will trade ex dividend today: Ansell, Asciano, Bega Cheese, CMI Ltd, Chandler Macleod, M2 Group, Macquarie Radio Network, Mortgage Choice, Navitas, Platinum Asset Management, Super Retail Group, Vocation, iiNet.
Currencies
Aussie traders’ focus will shift to Thursday’s private capital expenditure (CAPEX), says Stephen Innes, senior trader at OANDA Asia Pacific. “It will be an important release this time around as it will give insight into the next phase of economic growth in Australia,” he says.
The US dollar softened as traders focused on riskier currencies, while the battered euro hit a 19-month low against the Swiss franc amid speculation the European Central Bank will resort to quantitative easing.
“The abnormal low volatility regime that we saw this summer is coming to an end. The divergence of monetary policy between the Fed and the ECB is behind this, but for a move higher, the catalyst we probably need is a sharp rise in short-term US rates,” said Peter Kinsella, currency strategist at Commerzbank.
Commodities
Iron ore is down another 0.8 per cent to $US88.20 a tonne, according to The Steel Index,
Quarterly premiums paid on top of the LME cash price for aluminium may be set at record levels as a revival in global demand bumps up against supply constraints caused partly by bottlenecks at warehouses. Rio Tinto has offered Japanese buyers aluminium at a record premium of $US420 per tonne for October-December shipments, up 3-5 per cent from the previous quarter, four sources involved in talks said on Tuesday.
According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 2.3¢ a litre to 148.8¢ a litre in the week to August 24, reports Savanth Sebastian, economist at CommSec.
United States
The trading range for major indexes was among the narrowest of the year. Volume was depressed by the upcoming Labor Day holiday in the United States, with some market participants away on vacation.
“Volume is ridiculously slow, some of the slowest it has been in years, but sometimes you can make more money sitting on your hands,” said Michael Matousek, head trader at U.S Global Investors Inc in San Antonio.
Europe
European shares steadied near a one-month high on Wednesday, pausing after a 2-1/2-week rally, as a drop in German consumer morale and negative corporate news curbed appetite for stocks.
Market research group GfK said on Wednesday its forward-looking German consumer sentiment indicator, based on a survey of around 2,000 Germans, fell to 8.6 going into September from a downwardly revised 8.9 in August. It was the first drop since January 2013 and the biggest decline in more than three years. A Reuters poll had forecast a reading of 9.0.
What happened yesterday
Australian shares closed a volatile session stronger as official data showed construction activity fell for the third quarter in a row, company results season delivered mixed results, and a swag of big names dipped after trading ex-dividend.
