Australia shares are set for gains at the open today as investors and traders play catch up following yesterday’s holiday affected trading. The index fell yesterday, despite Friday’s stronger US jobs numbers and a consequently lower AUD. A mooted deal between Glencore and Rio, and firmer commodity prices – with the exception of iron ore – may also support shares today.
Futures markets are pointing to lift of around 20 points. Major banks and miners are showing strength in pre-match indications, as is Crown, despite a ban on smoking in Macau casinos coming into effect this week. Rio shares were up more than 1.5% in London trading following media reports that the chairman of global mining and investing group Glencore was sounding out Rio’s major shareholder Chinalco about a merger deal. Bounces in oil and copper prices may add to a more optimistic trading environment.
The RBA will make a statement following its monthly meeting today. No change is expected in interest rates, or the outlook for an “extended period of stability”. The likely focus for markets is any rhetoric around housing prices and the level of the AUD. For shares, today’s meeting is a hurdle to clear rather than a potential game-changer.
For further comment from Michael McCarthy at CMC Markets please call 02 8221 2135.