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Australian shares are expected to rise in early trade after Wall Street was mixed on weak manufacturing data but European markets rose strongly.
On the ASX24, the SPI futures index was 20 points higher to 4117. The Aussie has held well above the $US1.02 mark. It was recently buying $US1.0248, up from $US1.0226 late yesterday.
What you need to knowSPI futures are 20 points higher at 4117The $A is higher at $US1.0251In the US, the S&P500 rose 0.25% to 1365.51In Europe, the FTSE100 rose 1.25% to 5640.64Gold rose to $US1597.70 an ounceWTI crude oil fell $1.32 to $US83.64 a barrelReuters/CRB index is up 0.01% to 284.21
All 28 economists surveyed by Bloomberg expect the RBA to hold rates steady at 3.5 per cent today. The RBA cut rates by a total of 75 basis points at the last two monthly meetings but a run of stronger economic data since the June decision has made another downward move today less likely. Financial markets give a 25 basis points rate cut only a 15 per cent chance, according to Credit Suisse data.
Concern about the US economy grew after the Institute for Supply Management’s manufacturing index fell to 49.7, showing contraction for the first time in almost three years and trailing the median economist estimate of 52.
Making news today
In economics news:Reserve Bank of Australia board meeting and interest rate decisionAustralian Bureau of Statistics (ABS) building approvals for May
In company news:Image Resources NL general meetingIndochine Mining Ltd extraordinary general meeting
Analyst rating changes:Bandanna Energy rated new outperform at Credit SuisseAristocrat Leisure raised to hold at Deutsche bankSt Barbara downgraded to neutral from buy at Goldman SachsInvocare rated new buy at Nomura
Bond market pressure on Spain increased on Monday despite a plan that should cut Madrid’s debt by allowing a eurozone rescue fund to directly aid troubled Spanish banks.Italy’s 10-year bond yield tumbled a third day, dropping eight basis points to 5.74% after earlier losing as much as 19 basis pointsSpanish 10-year securities rose five basis points to 6.38%German 10-year bond yields lost six basis points to 1.52%
Treasuries and the dollar gained after a report showed American manufacturing unexpectedly shrank in June. Bloomberg reports that investors are plowing cash into new Treasuries at a record pace, making economic growth rather than budget austerity a key issue as President Barack Obama and Mitt Romney face off in November’s presidential election.US 10-year Treasury yields lost six basis points to 1.5%
US stocks edged higher on Monday, shaking off a surprise contraction in US manufacturing, which some investors took as a signal the Federal Reserve will take more forceful actions to boost the economy.
Key numbers:S&P500 added 0.25% at 1365.51Dow Jones Indus Avg lost 0.07% at 12871.39Nasdaq Composite Index added 0.55% at 2951.23
European stock markets have rallied while the euro has fallen against the dollar, as a trend sparked by last week’s surprise EU deal was underpinned by anticipation of an ECB rate cut, analysts say.
Key numbers:London’s FTSE 100 added 1.25% to 5640.64 In Frankfurt’s the DAX 30 added 1.24% to 6496.08 In Paris the CAC 40 added 1.36% to 3240.20
Asian stocks rose for a fourth day in the longest winning streak since March as economic data from China to Japan and steps by European leaders to address the sovereign-debt crisis eased concern global growth is slowing.
Key numbers:MSCI Asia Pacific Index added 0.4% to 117.67Japan’s Nikkei 225 was flat at 9003.48Hong Kong’s Hang Seng added 2.2% to 19441.46China’s Shanghai composite was flat at 2226.11
How we fared yesterday
The Australian sharemarket has closed higher, but local gains remained below those on US and European markets in the wake of last week’s summit of European Union leaders.
The benchmark S&P/ASX200 index rose 38.4 points, or 0.9 per cent, to 4133.0, while the broader All Ordinaries index was up 37.0 points, or 0.9 per cent, to 4172.5.
BusinessDay with agencies
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