The Australian share market is likely to be flat in early trade, with markets in both the United States and Britain closed for public holidays.
Markets at 7:15am (AEST):
- ASX SPI 200 futures flat at 5,712
- AUD: 74.36 US cents, 57.94 British pence, 82.75 Japanese yen, 66.59 euro cents, $NZ1.054
- US: S&P 500 +0.03pc to 2,415, Dow Jones -0.01pc to 21,080, Nasdaq steady at 6,210
- Europe: Euro Stoxx -0.17pc to 385.46, FTSE +0.4pc to 7,547, DAX +0.2pc to 12,629
- Commodities: Gold steady at $US1,266.60/ounce, Brent crude oil +0.2pc at $US52.25/barrel
It was a fairly weak run up into the long weekend on Wall Street last Friday, with consumer discretionary stocks the only standout.
Warehouse operator Costco Wholesale outperformed, after reporting results which pleased traders.
However, overall trading volumes in New York last Friday were the lowest of the year so far, with about 5.2 billion shares changing hands.
It was a fairly sluggish start to the week on most European markets, with activity muted because of the public holidays in the US and Britain.
Banking stocks lagged in the euro region, sending France’s CAC down 0.08 per cent to 5,332, while Germany’s DAX added 0.21 per cent to 12,628.
European Central Bank unlikely to shift policy
European Central Bank president Mario Draghi was speaking in Brussels and suggested there was no rush to ease the stimulus program in the euro area.
He said expansive monetary stimulus was still essential to restore stable inflation, even as the euro economy gained some momentum.
“We remain firmly convinced that an extraordinary amount of monetary policy support, including through our forward guidance, is still necessary,” he said.
“Domestic cost pressures, notably from wages, are still insufficient to support a durable and self-sustaining convergence of inflation towards our medium-term objective.”
NAB’s director of economics David de Garis said that Mr Draghi’s comments make the outcome of next week’s ECB meeting all but a foregone conclusion.
“It’s now only a week out from the ECB meeting and you can’t get much clearer than that,” he wrote.
“The ECB will then unveil its new inflation forecasts; an about turn from the ECB signalling a winding down now of QE [quantitative easing] would be a big surprise to the market.
“Even the more hawkish Bundesbank president and ECB Governing Council member Jens Weidmann recognised that internal eurozone price pressures beyond volatile energy are still muted but that it is legitimate question to raise of when to normalise policy.”
Australian shares are likely to struggle for direction today and, at 7:15am AEST, the ASX SPI 200 was steady at 5,713.
West Texas crude oil last traded at $US49.53 a barrel, the price of a barrel of Tapis had edged up to $US52.69 and spot gold was quoted at $US1,266.60 an ounce.