Local investors may start the day in a holding pattern ahead of the RBA's latest policy decision.
What you need2know
SPI futures up 15pts at 5121
AUD at 72.37 US cents, ¥89.037, €68.42 and £48.037
On Wall St, late, S&P 500 -0.1pc, Down -0.2%, Nasdaq -0.2%
In Europe, Stoxx 50 +0.5%, FTSE -0.3%, CAC +0.6%, DAX +0.9%
In London, BHP -1.3%
Spot gold up $US8.17 or 0.8% to $US1065.62/oz at 3.05pm NYC
Brent crude down 36 US cents or 0.8% at $US44.50/bbl at 2.41pm NYC
Iron ore down 3.44% to $US42.97 per tonne
What's on today
Australia Reserve Bank rates decision, home prices, balance of payments, building approvals, BHP Billiton hosts a three-day analyst tour of its Chile copper assets. A presentation by Daniel Malchuk, the company's copper president, will be released to the London and Australian exchanges at about 11:00 in London; Japan capital spending data (Q3); China purchasing indexes; UK Bank of England publishes stress tests of UK lenders, Financial Stability Report, Governor Mark Carney press conference; Germany unemployment data; US Markit manufacturing PMI, construction spending
Stocks in focus
Dick Smith saw its share price cut in half on Monday after the company shocked the market with an inventory writedown and abandoned its profit guidance.
Canaccord retains a "buy" on sandalwood producer TFS Corporation and raises the price target to $3.24 from $3.02 previously.
Caltex Australia is a "hold" at Deutsche Bank with a 12-month price target at $33.35 a share.
Currencies
The International Monetary Fund has approved China's yuan to join its benchmark currency basket in a victory for Beijing's campaign for recognition as a global economic power. The currency will have a 10.92 per cent share, in line with expectations, after a review of the weightings formula for the SDR, which determines which currencies countries can receive as part of IMF loans. The yuan will join the basket in October 2016, giving reserve managers time to prepare.
The pound briefly fell below $US1.50 for the first time since April after the newest member of the Bank of England's Monetary Policy Committee said he's comfortable with keeping interest rates at a record low. The dollar is headed for a 2.1 per cent gain versus the yen this month, the most since May.
Commodities
Singapore iron ore futures tumbled below $US40 a tonne on Monday, amid increasing worries over demand for the steelmaking ingredient from top consumer China. The iron ore contracts on the Singapore Exchange tumbled more than 3 per cent to below $US40 a tonne during the session. The January and February contracts traded $US39.67 a tonne and $US38.85 respectively.
Three-month copper on the London Metal Exchange closed up 0.3 per cent at $US4586 a tonne after a loss of 1.4 per cent in the previous session. Copper prices, bumping along near six-and-a-half-year lows of $US4443.50 a tonne hit a week ago, ended November with a 10 per cent loss, the biggest monthly decline since January.
LME nickel failed to trade in closing open outcry activity and was bid up 1.2 per cent at $US8880 a tonne, hardly making a dent in the 4.5 per cent losses seen on Friday, while zinc finished up 0.9 per cent at $US1562.
United States
US stocks were modestly lower in late afternoon trading Monday amid declines in health and consumer discretionary shares, though energy shares rose. Still, the three major equity indexes were poised to end higher for a second straight month.
Retail stocks continued to be in focus on Cyber Monday, the biggest online shopping day of the year.
Investors already are looking to this Friday's non-farm payrolls report, which comes ahead of a mid-December policy meeting of the Federal Reserve. Economists polled by Reuters expect the economy to have added 200,000 jobs in November. While the US central bank is widely expected to raise interest rates in December for the first time since 2006, the European Central Bank is expected to unveil fresh monetary easing measures on Thursday.
Europe
European stocks pulled off a second monthly advance on bets the region's central bank will increase stimulus at this week's meeting. The Stoxx Europe 600 Index rallied to a three-month high, taking its November gain to 2.7 per cent. Auto-related shares rose the most on Monday as the weakening euro is seen helping exporters. Economists surveyed by Bloomberg unanimously predict the European Central Bank will expand stimulus on Thursday.
"It's all about assessing your positions ahead of the ECB this week," said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. "That will give investors some direction going into the new year. While I think Draghi will deliver, the market has already been priced quite aggressively for a deposit- rate cut. We might get a case of people buying the rumour and selling the fact."
The Stoxx 600 increased 0.5 per cent to 385.43 at the close of trading in London, reversing an earlier drop of as much as 0.5 percent. While commodity producers also ended up rallying on Monday, BHP Billiton bucked the trend. It extended a seven-year low, after Brazil's Attorney General said the country will seek as much as 20 billion reais compensation for a dam collapse at an iron-ore venture owned by the company and Vale.
What happened yesterday
The Australian sharemarket fell on Monday, as investors fretted over whether China's sharemarket was in for another painful correction, while BHP Billiton shares continued plumbing new seven year lows. The market see-sawed higher in early trade, but fell as the open of Chinese share trading loomed, and followed the negative lead for the remainder of the session. At close of trade on Monday the benchmark S&P/ASX 200 was down 0.7 per cent at the day's low of 5166.5. The broader All Ordinaries fell 0.6 per cent to 5218.2.
BHP Billiton fell 3.6 per cent to $18.09 on weekend news that Brazil would seek $7 billion from BHP and its joint venture partner Vale following the failure of the tailings dam at its Samarco iron ore mine. Rival Rio Tinto fell 0.7 per cent to $45.91, while Fortescue Metals Group fell 4.9 per cent to $1.96. Katana Asset Management portfolio manager Romano Sala Tenna said the bad news for already beleaguered companies such as BHP Billiton was that investors were trading with the share price momentum. "It's not a market for contrarian or value investors, it's a market for momentum buyers ... the share prices are almost becoming self fulfilling" he said.
