Local shares are poised to fall at the open, as US stocks ended lower and base metals fell overnight on global growth worries.
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What you need2know
SPI futures down 15pts or 0.3% to 5235 at 6.15am Sydney time
AUD at 74.56 US cents, 79.67 Japanese yen, 64.85 Euro cents and 51.41 British pence
On Wall St, Dow -0.6%, S&P 500 -0.6%, Nasdaq -0.8%
In Europe, Stoxx 50 -1.2%, FTSE -1.2%, CAC -1.1%, DAX -1%
In London, BHP -5.8%, Rio -2.4%
Spot gold -1% to $US1273.75 ounce at 2.06pm New York time
Brent crude -1.6% to $US44.27 barrel at 1.41pm New York time
Iron ore -5.2% to $US60.09 tonne
What's on today
Local data: Trade and retail sales, HIA new home sales
Local earnings: National Australia Bank, News Corp
Central bank watch: St Louis Fed chief James Bullard in California; Fed presidents James Bullard, Robert Kaplan, Dennis Lockhart and John Williams a panel discussion on "International Monetary Policy and Reform in Practice" in Stanford
Overseas data: China Caixin services/composite PMIs; ECB's monthly economic bulletin; UK services PMI April; US jobless claims weekly, US energy association annual meeting in Washington
Overseas earnings: Kellogg, Activision Blizzard, Occidental Petroleum, Merck & Co, Discovery Communications, Chesapeake Energy, Square Inc, Alibaba Group Holding, Repsol, BT Group, Finmeccanica, Banca Monte dei Paschi di Siena
Stocks in focus
National Australia Bank, BHP Billiton
Currencies
The outlook for major Asian currencies has stayed remarkably stable, according to a Reuters poll of strategists. The consensus from over 50 currency strategists polled April 28 - May 4 is the yuan will likely trade at 6.50 by end-May, near Wednesday's 6.497, easing steadily to 6.65 by end-October and 6.72 by end-April 2017. While that 12-month consensus is still about 3 per cent lower than the current rate, analysts have held on to that view for three monthly polls now, suggesting forecasters mostly think a steady depreciation is more likely rather than a sharp fall. The most pessimistic call was 7.60 in a year, similar to last month's poll.
The Indian rupee is also forecast to weaken to 68.00 per dollar in six months, and then hold steady until end-April next year. Growth in Asia's third largest economy will remain one the fastest in the world this year, economists predict, and with inflation in control, they expect the Reserve Bank of India to cut its lending rate in the last quarter of 2016.
The South Korean won will likely fall to 1190 in a year, 3 per cent down from Wednesday's rate of 1154 and similar to expectations last month.
Commodities
Iron ore with 62 per cent content delivered to Qingdao declined 5.2 per cent to $US60.09 a tonne on Wednesday, shrinking its advance this year to 38 per cent, according to Metal Bulletin.
Mark Mobius is piling into commodity stocks in China, saying that a rebound in raw-material markets is only getting started after prices sank too far and that gains may be extreme.
Three-month aluminium fell 0.2 per cent to $US1630 a tonne. However it gained about 10 per cent in April and is trading near its highest since July last year. Higher prices are partly due to a decision in December by Chinese smelters to shut capacity, a move that was followed by plans by six smelters to form a joint venture to possibly stockpile up to 1 million tonnes of the metal. "Aluminium prices have risen too much, too fast. It's going to pull in more supply," INTL FCStone analyst Edward Meir said. "This year should be a year of transition, we need to see more supply leave the market, companies to shut down smelters or merge them, not open new ones. But none of this is happening right now."
United States
US stocks declined, with the S&P 500 remaining at a three-week low, amid mixed data and lingering concerns weak global growth will weigh on the American economy.
Bank shares were among the biggest losers for a second day, while energy and raw-material producers - the two strongest groups as stocks rebounded from a February low - lagged for a third session. Priceline Group tumbled after its profit forecast disappointed, with executives citing in part the "fragility" of the global economy. Investors stuck with a recent preference for defensive shares, as utilities, consumer staples and phone companies advanced.
"We had several economic numbers that came out, and ADP in particular was weaker than expected, which is negative for the market," said Richard Sichel, chief investment officer at Philadelphia Trust Co, which oversees $US2 billion. "At the moment, data around the world isn't being taken as positive. We started to test the upper end of the range, and with the absence of more good news to push the needle up, we're consolidating and moving down."
A report today showed US companies hired fewer workers in April than estimated, signalling employment gains may have peaked and adding to anxiety over growth sparked by yesterday's weaker factory readings overseas. Separate data showed American service companies expanded in April at the fastest pace in four months, suggesting the economy is firming up after a weak start to the year.
Europe
European shares slid a fourth day as earnings failed to lift investor sentiment. Anheuser-Busch InBev - the world's largest brewer - slid 1.6 per cent after reporting sales and profit growth that missed estimates.
Royal Dutch Shell's first-quarter profit beat analyst estimates as better-than-expected earnings from oil refining and chemicals production countered crude prices at a 12-year low. Profit adjusted for one-time items and inventory changes fell 58 per cent to $US1.6 billion, exceeding the $US1.18 billion average of analysts' estimates compiled by Bloomberg.
A report from Markit Economics indicated that European Central Bank policy is helping to sustain growth in the euro area economy, though the pace is "tepid" and inflation remains too low.
Credit Suisse Group is carrying out a fresh round of job cuts in London, shrinking its workforce by about 180 employees this week, most of them in the trading unit, two people said.
What happened yesterday
Miners led a steep fall in the Australian sharemarket on Wednesday, with the bulk of the damage caused by BHP Billiton, which posted its worst day in more than seven years. The S&P/ASX 200 failed to consolidate Tuesday's first foray into the black this year, with the benchmark index slipping 1.6 per cent, or 83 points, to close at the day's low of 5271.1 while the All Ordinaries fell 1.5 per cent, or 79 points, to 5335.6.
