Local shares are set to open slightly higher on a weak lead from a mixed day on Wall Streeet.
What you need2know
SPI futures up 10pts at 5179
AUD at 71.58 US cents, 86.06 Japanese yen, 63.49 Euro cents and 51.93 British pence
On Wall St,S&P 500 -0.3%, Dow +0.2%, Nasdaq -0.6%
In Europe, Stoxx 50 +0.9%, FTSE +0.4%, CAC +1%, DAX +0.9%
Spot gold up $US10.90 or 1% to $US1146.65/ounce
Brent crude up $US2.68 or 5.4% to $US51.93/barrel
Iron ore untraded at $US53.14 per tonne
What's on today
Australia HIA new home sales; US consumer credit; Bank of Japan policy meeting concludes
Stocks in focus
Deutsche Bank has a "hold" on Crown Resorts and a target price of $13.85. "Macau gross gaming revenue in September declined by 33 per cent to MOP17.13 billion, which was in-line with market expectations. YTD revenue is down 36.2 per cent on pcp. Sequentially, revenue is down 8 per cent vs August."
Citi moved OceanaGold to "buy" from "neutral" after the now-likely acquisition of the Haile Gold Project in South Carolina via Romarco Minerals (R.TX), and a pullback in the OGC share price, but put a lower target of $2.46 a share on the miner, from $$2.73 previously.
Trading ex dividend today: ARB Corp, Ausmani, ICSGlobal, Japara Healthcare, Premier Investments.
Currencies
The Australian dollar strengthened for a fifth day as traders pared bets that the central bank will lower interest rates this year after keeping them unchanged at a record low of 2 per cent on Tuesday. "While there was chatter over the previous weeks and days that the bank was considering doing more, there doesn't seem to be any rush to do so," said Jeremy Stretch, head of foreign- exchange strategy at Canadian Imperial Bank of Commerce in London. "We're looking for Aussie to continue squeezing higher."
For commodity and emerging market currencies, a drop in 10-year Treasury yields to below 2 per cent helps, but is more placebo than medicine for the underlying ailment, says Kit Juckes at Societe General. "The same can be said, by the way, of global equity markets. Can we really expect asset markets to rally again, lemming-like, on the back of easy money and in the absence of better growth? I can't see a lasting rebound in EM and commodity FX until we have more clarity on the Chinese economic outlook and crucially, on China's currency policy."
Commodities
Oil prices jumped as much as $US2 a barrel, breaking out of a month-long trading range on a mix of technical buying and US government data suggesting that the global supply glut could be ebbing. Global benchmark Brent crude rallied for a third straight day and was set to settle above $US50 a barrel for the first time in a month. This convinced some dealers that there was little chance prices would slide back to the 6-1/2-year lows touched in August.
"We have reduced the probability of a return to the $US37-$US38 area per nearby WTI," said Jim Ritterbusch of oil consultancy Ritterbusch & Associates in North Wabash, Chicago. "We will maintain a longstanding view that price declines below this support level are virtually off of the table."
Total world supply is expected to rise to 95.98 million barrels a day in 2016, 0.1 per cent less than forecast last month, the EIA said in its Short-Term Energy Outlook. Demand is expected to rise 270,000 bpd to 95.2 million barrels, up 0.3 per cent from September's forecast.
United States
US stocks fell on Tuesday as healthcare companies lost ground and investors eyed upcoming quarterly reports that are expected to show a dip in corporate earnings. A surge in DuPont's stock helped keep the Dow Jones industrial average in positive territory but the S&P 500 and Nasdaq lost ground, with a sharp drop in biotech stocks.
The S&P health index lost 2.2 per cent, the worst performer among the ten major S&P sectors. The sector has been under intense scrutiny over high drug prices.
"What we're getting today is quite frankly just people taking some chips off table after a five-day rally," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
Europe
European stocks advanced for a third day as investors assessed valuations and speculated that weak economic data will encourage central banks to keep monetary policy accommodative for longer. The Stoxx 600 rose 0.6 per cent to 360.41 at the close of trading, its highest level in more than two weeks. The equity gauge had lost as much as 18 per cent from its April record, posting its worst quarterly drop since 2011 amid concerns about the slowing Chinese economy and an impending Federal Reserve rate increase.
"The (latest US) job report lowered the bets for any rate hike this year, which should give some boost to the markets after suffering this third quarter," said Guillermo Hernandez Sampere, who helps manage about €150 million as head of trading at MPPM EK in Eppstein, Germany. "Investors are tired of betting that the Fed will do anything this year. A lot of people have to reduce their protection, which will feed into a rally. From a value point, we are still on an inexpensive level."
The recent selloff in European equities has once again pushed them into attractive territory, trading at 14 times their estimated earnings, down from an April high of 16.6. The earnings yield of Euro Stoxx 50 Index companies makes them more appealing than at any time since 2011 relative to government debt.
What happened yesterday
A two-day rally on the Australian sharemarket lost some of its puff of during Tuesday's session, but strong buying in the miners helped push the index to a near three-week high. At close of trade the benchmark S&P/ASX 200 index closed 17 points, or 0.3 per cent, higher at 5167.4 after reaching as high as 5220 in early trade. The All Ordinaries finished 15 points, or 0.3 per cent, higher to 5199
