The ASX Today

The ASX looks like it will start the week flat after a mild bout of risk aversion swept through markets on Friday.

It's a quiet week for data, following a quiet end to the week in equities land. Europe and US markets ended mostly flat-to-higher on Friday for ASX SPI 200 Futures traders to add eight points.

The Australian dollar is buying a little less this morning as the US dollar ascends.

KEY POINTS

• ASX Futures indicate a flat open, but analysts more optimistic
• Big Four banks drop ATM fees, financials hint at a flat-to-higher open on the ASX this morning
• Resources under more pressure with basic metals prices falling on Friday
• Politics to dominate markets (NZ, German election) in light of limited economic data flow
• The Aussie dollar falls marginally to US79.6c with support diminishing

Over the weekend our Big Four banks announced they would drop their ATM fees, with Commonwealth Bank taking the lead on this one.

It's good news for customers, and whether it's lifted public opinion or something else has done the trick, Commonwealth Bank at 8am AEST was showing potentially the most uplift for the open, with the other three banks indicating they would open relatively flat. 

IG analyst Chris Weston is a little more optimistic with his opening call for the ASX than Futures would suggest, although notes a couple of potential hurdles.

Resources look set for more pressure. Chinese iron ore demand is said to be falling as the Government in Beijing seeks to clean up China in the coming months and improve air quality. Iron ore has officially entered a bear market, with spot iron ore closing 3.8 per cent lower on Friday.

Our mixed materials large-caps might find support though, with BHP's ADR in the US closing up 0.8 per cent, Weston believing BHP's variability to petroleum supporting it for the open.

Rhetorical tension between the US and North Korea is escalating on North Korea saying on Friday it could conduct its first atmospheric nuclear test in decades. The North Korean regime's Ambassador to the UN later said his state is “finally only a few steps away from the final gate of completion of the state nuclear force”.

There were a couple of election shocks at the weekend in Germany and New Zealand. Current German Prime Minister Angela Merkel didn't exactly pull through in flying colours, winning the election but losing 10 per cent of her own parties' vote, and in a shock move New Zealand First leader Winston Peters is in the box seat for the third time in his career.

The Aussie dollar was dragged down by weakness in Chinese steel and iron ore futures on Friday, and considering it's a light data week, it will be sentiment that drives our local currency over the next few days.

Westpac market strategists have stated a 1-day neutral outlook for the Aussie in a US79-80c range, but concede it could be weighed down today by any negative euro reaction to the German election. Meanwhile, the chief market strategist at AxiTrader, Greg McKenna, thinks US78.5c is a reasonable level for the Aussie to test this week.