European shares rebounded on Monday from a two-week drop. The German Dax outperformed, after investors concluded Russia would not send troops into Ukraine anytime soon. Eurozone banking shares featured among the top gainers on Monday. Italy's fourth biggest bank Banco Popolare rose 8.2 per cent after stronger-than-expected quarterly results. The FTSEurofirst 300 index rose by 1.3 per cent with the German Dax up by 1.9 per cent while the UK FTSE gained 1 per cent. But Australia's major miners were higher in London trade with shares in BHP Billiton up by 1.9 per cent while Rio Tinto rose by 3.6 per cent.
US sharemarkets rose on Monday, continuing the recovery from after the rebounded on Friday. Gains were broad-based with nine out of the 10 S&P sectors higher. Consumer staples shares led the gains with a 1 per cent increase. The Dow Jones index rose by 16 points or 0.1 per cent with the S&P 500 index up by 0.3 per cent while the Nasdaq rose by 30 points or 0.7 per cent.
US treasury prices rose on Monday (yields lower) as traders still held on to the recent safe-haven positions. US 2-year yields fell to 2 points to 0.444 per cent while US 10-year yields fell by 1 point to 2.422 per cent.
The euro and commodity currencies were weaker against the US dollar as traders continued to worry about the impact of the Russia-Ukraine conflict on broader eurozone growth. The euro fell from highs near $US1.3405 to around $US1.3380, before ending US trade near $US1.3385. The Australian dollar fell from highs near US92.75c to lows near US92.55c before ending the US session close to US92.60c. But the Japanese yen eased from 102.00 yen per US dollar to JPY102.25, ending US trade near JPY102.15.
World oil prices were mixed on Monday. Brent fell on the view that US military strikes in Iraq could reduce the prospect of disruptions to oil supplies. But Nymex crude rose as traders moved to cover short positions amid expectations on a further drawdown in domestic crude inventory stocks. Brent crude fell by US45c or 0.4 per cent to $US104.57 a barrel but the US Nymex price rose by US43 cents a barrel to $US95.70 a barrel.
Base metal prices were higher by up to 0.7 per cent on Monday with lead (up 0.7 per cent) and nickel (up 0.5 per cent). Gold prices fell slightly on Monday with the Comex gold futures quote down by US50c to $US1,310.50 per ounce. Iron ore fell by US40c on Tuesday or 0.4 per cent to $US95.30 a tonne.
Ahead: In Australia, the NAB business survey is released, alongside credit card statistics and residential property prices (June Quarter). In the US, no major economic data is scheduled.
Craig James is chief economist at Commsec.