Scoreboard: ECB dampener

Fresh doubts were raised about the ECB's ability to go ahead with stimulus measures, while in the US traders dissected soft economic data.

In US economic data the national activity index eased from 0.29 to 0.14 in October. The Markit services "flash" index eased from 57.1 to 56.3 in November and the Dallas Federal Reserve index was steady at 10.5 in November.

European shares were mixed on Monday. The influential German Ifo business sentiment index rose from 103.2 to 104.7 in November. But there were doubts about any forthcoming stimulus by the European Central Bank with the German Bundesbank President saying measures could face "legal limits". The FTSEurofirst 300 index rose by 0.1 per cent, the Euro STOXX 50 gained 0.6 per cent and the German Dax lifted 0.5 per cent. But the UK FTSE fell by 0.3 per cent, dragged down by the resources sector. In London trade shares in BHP Billiton fell by 2.5 per cent while Rio Tinto lost 2.2 per cent. 

US sharemarkets generally traded in tight ranges on Monday with tech stocks leading gains. At the close of trade, the Dow Jones was up by almost 8 points or less than 0.1 per cent after trading in a 62 point range. The S&P 500 index was up by 0.3 per cent and the Nasdaq gained 42 points or 0.9 per cent.

US treasuries rose modestly on Monday (yields lower). Traders assessed the ability of the European Central Bank to provide more stimulus as well as dissecting softer US economic data. The US Treasury sold $US28 billion in two-year notes and will sell $US13bn in two-year floating rate notes, $US35bn in five-year notes and $US29bn in seven-year notes this week. US two-year yields fell by 1 point to 0.501 per cent while US 10-year yields fell by 1 point to 2.308 per cent.

Major currencies were again mixed against the greenback in the European and US sessions on Monday. The euro lifted from lows near $US1.2375 to highs near $US1.2445, and was around $US1.2435 in late US trade. The Australian dollar fell from highs near US86.85c to around US86.00c, and was near US86.10c in late US trade. And the Japanese yen eased from 117.80 yen per US dollar to ¥118.48 and was near ¥118.29 in late US trade.

World oil prices eased modestly in thin trade on Monday as traders positioned ahead of Thursday's meeting by OPEC nations to set production quotas. Brent crude fell by US68c or 0.8 per cent to $US79.68 a barrel while the US Nymex crude price fell by US73c or 1.0 per cent to $US75.78 a barrel.

Base metal prices were generally lower by up to 0.8 per cent on the London Metal Exchange on Monday with tin and copper leading the declines. But aluminium and nickel edged up 0.1 per cent. Gold fell slightly with Comex gold futures down by US20c an ounce to $US1,197.50 per ounce. Iron ore rose by US20c to $US70.00 a tonne on Monday.

Ahead: In Australia, Reserve Bank Deputy Governor Philip Lowe delivers a speech and Medibank Private lists on the sharemarket. In the US, preliminary economic growth (GDP) data is released with monthly home prices, consumer confidence, weekly chain store sales and Richmond and Dallas Federal Reserve indexes.

Craig James is chief economist at CommSec.

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