Scoreboard: M&A optimism

European markets rose overnight on merger and acquisition activity, while Wall Street also made gains.

In the US, consumer credit rose by $US15.92 billion in September, above forecasts tipping a $US15.1bn gain. The Employment Trends index rose from 121.7 to 123.09 in October.

European shares rose on Monday in response to merger and acquisition activity in the food, telecom and oil services sectors. Reuters reported that shares in Portugal Telecom jumped 11.8 per cent to 1.36 on Monday following a €1.35-a-share takeover bid for the company by Angola's richest woman, Isabel dos Santos. The FTSEurofirst 300 index, the UK FTSE and German Dax all rose by 0.7 per cent. In London trade shares in BHP Billiton fell by 0.2 per cent with Rio Tinto down by 0.5 per cent.

US sharemarkets traded modestly higher on Monday in the absence of major corporate or economic news. Shares in Toll Brothers, the largest US luxury homebuilder, reported a 29 per cent lift in quarterly revenue in response to strong housing demand. With just over an hour of trade to go, the Dow Jones was up by 40 points or 0.2 per cent, the S&P 500 index was up by 0.3 per cent and the Nasdaq was up by 15 points or 0.3 per cent.

US treasury prices fell on Monday (yields higher) in response to a disappointing $26 billion auction of three-year notes. US Treasury will sell $24 billion in 10-year notes on Wednesday and $16 billion in 30-year bonds on Thursday. US two-year yields rose by 3 points to 0.535 per cent while US 10-year yields were up by 6 points to 2.357 per cent.

Major currencies were weaker against the US dollar in European and US trade on Monday. The Euro eased from highs near $US1.2505 to lows near $US1.2420, and was around the lows in late US trade. The Aussie dollar fell from highs near US86.60c to near US86.05c, and was near the lows in late US trade. The Japanese yen weakened from ¥113.87 per US dollar to ¥114.90 and was near the weakest levels in late US trade.

World oil prices fell again on Monday as the US dollar strengthened. A stronger greenback weakens the purchasing power for European and Asian buyers for dollar-denominated commodities. And OPEC oil producers aren't expected to reduce production to support prices when they meet later this month. Brent crude fell by $US1.05 or 1.3 per cent to $US82.34 a barrel. US Nymex crude price fell by $US1.25 or 1.6 per cent to $US77.40 a barrel.

Base metal prices were largely lower on the London Metal Exchange on Monday, falling by up to 1.2 per cent. But lead went against the trend, up 0.1 per cent. Gold fell on Monday in response a stronger US dollar with Comex gold futures down by $US10 an ounce or 0.9 per cent to $US1,159.80 per ounce. Iron ore was unchanged at $US75.50 a tonne on Monday.

Ahead: In Australia, the NAB business survey is released with the Roy Morgan consumer sentiment survey and the ABS home price series. In the US, data on weekly chain store sales is released with the NFIB business optimism index is issued.

Craig James is chief economist at CommSec.