The Australian share market looks to open higher ahead of the Reserve Bank Board’s monetary policy decision this afternoon. Overnight global markets saw a soft start to the new month as Greece’s debt concerns remained in focus.
Wall Street was encouraged by upbeat economic news ahead of the nation’s monthly jobs report on Friday. While America’s consumer spending was steady in April, manufacturing activity grew and construction spending rose to a six-year high.
Global markets
Wall Street ended higher on Monday: The Dow Jones Industrial Average added 0.2 per cent to close at 18,040, the S&P 500 added 0.2 per cent to close at 2,112 and the Nasdaq added 0.3 per cent to close at 5,083.
European markets were mixed on Monday: London's FTSE 100 fell 0.4 per cent, France's CAC 40 added 0.4 per cent and Germany's DAX firmed 0.2 per cent.
Asian markets lifted into the new week: Japan’s Nikkei put on 0.03 per cent, Hong Kong’s Hang Seng gained 0.6 per cent, and China’s Shanghai Composite jumped 4.7 per cent.
The Australian share market started the new week and month 0.7 per cent lower: The S&P/ASX 200 retreated 42 points to close at 5,735. On the futures market the SPI is 15 points higher.
Currencies
The Australian dollar is trading at a seven week low against the greenback and at 7:30am was buying $US0.7609, 50.07 Pence Sterling, 94.97 Yen and 69.69 Euro cents.
Economic news due out today
Reserve Bank of Australia: June interest rate decision
Australian Bureau of Statistics: Balance of payments data for the March quarter
RBA cash rate expectations
Commonwealth Bank of Australia’s
(ASX:CBA) CommSec does not expect the RBA to cut rates today. Rather, the broking arm believes the RBA will stay on the interest rate sidelines and attempt to gauge how the economy tracks over coming months. CommSec says policymakers will be hard pressed to provide further stimulus and the focus instead will be on how the economic recovery will pan out post-budget. Shares in Commonwealth Bank of Australia dipped 0.72 per cent to close at $84.48 yesterday.
National Australia Bank Limited
(ASX:NAB) says it is almost odds on that the Reserve Bank Board will leave the cash rate steady in June irrespective of the weaker capex read. Following rate cuts in February and again in May NAB believes the RBA will now be able review the economy’s performance for a quarter or more before a fresh re-assessment. Shares in National Australia Bank slipped 0.84 per cent to close at $34.03 yesterday.
Ex-dividends
CSR Limited
(ASX:CSR) paying an 11.5 cent unfranked dividend
Commodities
Gold has declined $1.10 to $US1,189 an ounce for the August contract on Comex.
Silver has eased $0.02 to $16.68 for July.
Copper has dipped $0.01 to $2.72 a pound.
Oil has lost $0.10 to $US60.20 a barrel for July light crude in New York.
Thank you for watching the Australian Share Market Outlook on Tuesday 2 June. I’m Lelde Smits for the Finance News Network.
