Markets Live: Stocks consolidate gains

4.00pm: Ryanair, Europe's biggest budget airline, undershot analyst forecasts with a profit slide of 29 per cent in the three months to June as it grappled with a toxic mix of austerity, recession and stubbornly high fuel prices.

The Dublin-based airline, famous for its no-frills service, said the weak economic outlook for Europe would continue to restrain fare growth for the rest of the year, but maintained its forecast of a profit of between 400 million euros and 440 million for the year to March.

"Austerity is biting. There is just less money around," said Chief Financial Officer Howard Millar. "There are no particular bright or black spots."

Net profit for three months to June was 99 million euros, compared with a forecast of 123 million by four analysts polled by Thomson Reuters. Earnings per share were 6.9 euro cent in the quarter, compared to an average analyst forecast of 9 cents.

3.50pm: Fitch Ratings has affirmed Crown Limited's Long-Term Issuer Default Rating (IDR) and its senior unsecured rating at 'BBB'. The Outlook on the IDR is Stable.

The Australian gaming and entertainment operator's ratings are supported by its strong market position as the sole licensed casino operator in the states of Victoria and Western Australia. Its gaming assets in Melbourne and Perth have demonstrated consistent cash flow generation, which in part reflect stable and predictable local markets that represent over 50% of consolidated revenue.

3.42pm: With minutes to go before the close of market, here's what CMC senior trader Tim Waterer had to say about the day's action:

• Comments from European leaders in recent times have shown some semblance of a unified voice, and this refreshing change has been warmly received by traders who have again rediscovered their inclination to buy.
• Comments by the ECB President as well as by the leaders of France and Germany have indicated to financial markets that there is indeed dedication to the cause from the major players and that they are not just prepared to go through the motions and hope for the best.
• However, for the market exuberance on display in recent days to have any longevity it will require the ECB to be decisive not just with its words but with its actions. Cue the bond buying. The market’s newfound optimism has been largely based on expectations that the ECB will up the ante by purchasing bonds, which makes this Thursday’s press conference not only a key event but also a potential source for a letdown if the ECB deliver nothing new.
• With European leaders showing some fervour regarding the future of the eurozone, the ASX200 enjoyed a robust start to the week with the financial stocks being among the prime movers within the index. The big four banks all ‘made hay’ on the better market sentiment, while the blue chip miners such as BHP and RIO also made the best of the conditions with traders in a fairly cheerful mood courtesy of the perceived changing of the tide in Europe.

3.36pm: Oil and gas producer Beach Energy is forecasting profit growth in the 2012-13 financial year after exceeding its production forecasts in 2011-12.

Beach Energy produced 7.5 million barrels of oil equivalent (mmboe) in the 12 months to June 30, up 15 per cent from the previous year, it said on Monday.

Annual production was slightly higher than Beach had forecast, and was the result of improved weather conditions from the previous year, it said.

Sales revenue in the year to June was $619 million, up 25 per cent on $497 million in the previous year.

3.30pm: Brent crude rose toward $107 per barrel, stretching gains into a fifth consecutive day on hopes the United States and Europe will this week announce new measures to shore up their fragile economies, boosting the outlook for oil demand.

Brent crude rose 45 cents to $US106.92 per barrel. US crude rose 61 cents to $US90.74 per barrel, gaining for a fifth day.

3.20pm: Australia's ASX200 gains are about mid-range for the region - better than Japan and China, in line with Korea and Singapore, less than in Hong Kong.

The outlook is a bit mixed. Dow futures are down about 0.3% while London's are up 0.5% - suggesting the local market will probably edge sideways the rest of the day.

CBA, though, remains on a roll. CBA shares hit a fresh 26-month high of $57.66, and the financials are up about 1.4% for the day. CBA is contributing about one-fifth of the wider ASX200's advance.

Fortescue Metals, though, continues to falter. Its shares have sagged another 1.7% to $4.08 in recent trade. By contrast, Rio and BHP are both up more than 0.5% in recent trading.

3.15pm: Complaining about your power bills? Consider this:

A massive grid failure in Delhi and much of northern India left more than 300 million people without electricity on Monday in one of the worst blackouts to hit the country in more than a decade, Reuters reports.

The lights in Delhi and seven states went out about 2 a.m and had not been restored by the morning rush-hour, leaving the capital's workers sweltering overnight, then stranded at metro stations in the morning as trains were cancelled.

Chaos reigned on Delhi's always-hectic roads as traffic lights failed.

3.10pm: Telstra's chief David Thodey has ruled out any major acquisitions, and named John Allan as the Sensis managing director.

Must have been a pleasant lunch, with Telstra shares touching $4 even as he munched, a price not seen since December 2008.

2.58pm: Coal explorer Blackwood Corp has entered a trading halt, reigniting speculation about the fate of Nathan Tinkler's audacious $5.3 billion privatisation bid for Whitehaven Coal.

A spokesman for the mining entrepreneur denied the trading halt had implications for Mr Tinkler's bid for Whitehaven. Whitehaven shares, though, lost ground in a rising market.

In early May, Blackwood announced a $28.4 million placement to Tinkler vehicle Mulsanne Resources, priced at 30 cents a share, subject to shareholder approval. The placement would fund a drilling campaign.

Investors endorsed the placement plan, which would see Mulsanne emerge with a third of the company, at an extraordinary general meeting on July 12. There had been expectations the issue would be completed soon, which haven't been realised.

Read the full story.

2.52pm: The outlook for the $2.8 billion metropolitan free-to-air TV advertising market remains subdued, despite a better than expected result for the first half of the year.

KPMG figures out last week showed that the metropolitan TV ad market shrank by 1.9 per cent from January to June.

Channel Seven picked up the lion’s share with 40 per cent, Nine with 34.45 per cent and Ten trailed with 25.5 per cent, according to figures released by FreeTV.

But the KPMG figure surprised some analysts; Goldman Sachs had pegged the half to contract by 5.1 per cent and figures from researcher SMI, which tracks the advertising booked through media agencies, had the half down at 2.4 per cent.

2.46pm: BusinessDay's Michael Pascoe has filed: BHP Billiton in a dark place.

Lunchtime has come and gone and there's no word from BHP Billiton, so presumably that means a weekend report about a two-year delay in making a $30 billion expansion decision about Olympic Dam is wrong - or maybe BHP itself just doesn't know. That's possible.

You can't expect the world's biggest miner to respond to every media report of a project happening/not happening/maybe happening, but when there's a growing haze around the company, its board, senior management and markets and when the issue is as big both politically and physically as Olympic Dam, well, you have to wonder.

And you wonder harder when there's a serious allegation that the company has failed its continuous reporting obligations while happily telling some “outsiders” that $30 billion is going on the backburner.

Little wonder the reputation of CEO Marius Kloppers is on the slide with investors. At this rate, that of chairman Jac Nasser won't be far behind.

2.40pm: Last week’s star Sirius Resources is continuing its winning run, rising more than 14 per cent today.

Sirius was the junior explorer that leapt from 5 cents to 45 cents in a single day: a rise of 689 per cent.

The stock continued that climb by a more modest 25 per cent to 56 cents on Friday, and is today testing 65 cents after putting out another update on its Nova resource near Norseman in Western Australia.

2.35pm: Here's an interesting read from the small business desk about the founder of Carman's Fine Foods.

What does it take to make your business an overnight success? About 20 years of hard work, according to muesli queen Carolyn Creswell, whose company is now turning over $50 million a year.

Read the full story.

2.30pm: The big four banks are doing well, lead by the Commonwealth Bank which hit a 26 month high earlier today.

• CBA: +2.43%
• ANZ: +1.5
• NAB: +1.44%
• Westpac: +1.37%

2.22pm: Former Herald Sun editor Simon Pristel has been appointed Melbourne news director for Channel Seven.

Seven managing director Lewis Martin said: "Mr Pristel comes to the newsroom with a pedigree unequalled in identifying, producing and telling news stories that Victorians care about."

Mr Pristel had "passion and skills in this area (which), together with his proven leadership ability, will provide an environment of success essential to the future of news delivery across a multi-platform environment."

Replacing current news director Steve Carey immediately, Mr Pristel said the role was: "a great opportunity to bring my 23 years of experience and passion for news to TV."

Mr Carey said he would take a break to spend time with his family, before discussing his next move with Channel Seven.

2.15pm: Mining magnate Gina Rinehart has been ordered to pay the legal bills of three of her four children incurred in their long-running battle to remove her as trustee of the family's multibillion-dollar trust.

Mrs Rinehart, who is Australia's richest person and the wealthiest woman in the world, has also been ordered to pay costs to media organisations Fairfax Media (publisher of this website), Nationwide News (publisher of The Daily Telegraph and The Australian) and the Australian Broadcasting Corporation.

The mining magnate has been fighting her three eldest children - John Hancock, Bianca Rinehart and Hope Welker - in the courts over control of the trust since September last year.

Read the full story.

2.08pm: Rising expectations of bolder policy moves to counter the eurozone's debt crisis are set to help Italy sell up to 5.5 billion euros in bonds at an auction on Monday, where benchmark 10-year yields will be closely watched as a barometer of market stress.

Comments by European Central Bank President Mario Draghi, who last week pledged to do whatever necessary to defend the single currency, pushed Italian and Spanish yields lower at the end of last week, halting a worrying rise in the debt costs of the countries at the centre of the crisis.

The September 2022 bond which Italy will sell on Monday yielded slightly less than 6 per cent late on Friday, pointing to a likely easing in funding costs for Rome after it paid a punitive 6.19 per cent yield a month earlier to sell 10-year paper amid high uncertainty ahead of a European Union summit.

Extreme volatility in thin holiday markets, however, warrants caution, debt analysts said.

Italy will also sell a five-year bond due in June 2017 which on Friday was trading at around 5.4 per cent - well below a level of 5.84 per cent reached at an end-June sale. Up to 750 million euros of a November 2015 bond no longer sold on a regular basis are also on offer.

Italy's 10-year yields hit their highest since January at 6.6 per cent last week as investors fretted about the cost of a potential full bailout for Spain and the impact this could have on Italy.

2.02pm: In relation to a report today that there has been informal discussions between Echo and Crown about a JV for VIP Asian gamblers once Crown stake reaches 25% - Echo spokesman today said the company does not comment on speculation. No comment from Crown officials.

1.57pm: Japan’s factory output turned down unexpectedly last month, official data showed today, stoking concerns that turmoil overseas is damaging a recovery in the world’s third-largest economy.

The output decline came amid growing fears about the fiscal situation in Europe -- a major market for Japanese products -- and a strong yen hurting demand for products from the nation’s factories.

Industrial production in June edged down 0.1 per cent from the previous month, said the ministry of economy, trade and industry -- smaller than a revised 3.4 per cent fall in May but well short of market expectations for a 1.6 per cent rise.

Underlining the downward trend, data also showed that factory output declined 2.2 per cent in the April to June quarter from a year earlier.

1.51pm: Here's a snapshot of how the region's markets are performing:

• Nikkei (Japan): +0.62%
• Shanghai: -0.13
• Taiwan: +0.68%
• South Korea: 0.9%
• Singapore: +0.76%
• New Zealand: +0.38%

1.45pm: The battle for the consumer dollar is about to get tougher for traditional retailers with Australia Post lining up another online partner to chip away at prices.

The postal service will be the exclusive shipping partner with a new Australia-based international shopping service called Tarazz.com.au.

"This is going to be perceived as a major kick in the guts for a retail industry already under significant pressure from overseas online retailers,” said Grant Arnott manager for the Online Retailer.

Read the full story.

1.39pm: We know the US in the midsts of severe drought in many regions, and we know local climate models point to an El Nino weather pattern forming for eastern states.

Now we have this from the West:

Grain output in Western Australia, the country’s biggest wheat grower, may decline as much as 40 per cent as dry weather and frost threaten crops just as a drought in the US pushes prices to the highest since 2008.

Total production may be 9 million to 11 million metric tons in 2012-2013, according to Max Johnson, grain operations manager at CBH Group, the state’s biggest handler. That compares with a record harvest of 15 million tons a year earlier. About 65 per cent to 70 per cent of the crop may be wheat, Johnson said.

Wheat is poised for the biggest monthly gain in two years, and corn extended a record rally today, as the US drought and heat waves in Europe hurt harvest prospects, Bloomberg reports.

1.25pm: Adele Ferguson today writes about new research on high frequency trading (HFT) which challenges a number of studies that say HFT cuts costs for investors. She writes:

The report, released by Pragma Securities, has gone viral on the internet, as it picks up on a share trading phenomenon that remains a mystery to regulators and retail investors ...

The report flies in the face of the typical argument that HFT reduces trading costs by making it easier for investors to buy and sell and it illustrates that costs initially fall as trading volumes rise but as average volume continues to rise, so do the costs and time to execute. Full story.

1.16pm: Shares in Kingsgate Consolidated have fallen to new multi-year lows, hitting $4.18 earlier today, before stabilising later in the session at $4.23, or down 16c.

Investors are continuing to react negatively to its poor June quarter production report issued last week, which disclosed poorer-than-expected production for the quarter, largely due to ongoing difficulties with its Challenger mine in south Australia.

That weak production data prompted analysts to slash year-to-June profit forecasts, with Morningstar now estimating earnings a share of just 57c, down from 72c a share forecast year. In the previous financial year, earnings per share stood at 18.6c down, from 74.5c a year earlier.

The shares are now trading well below the $7.10 level where it placed shares with institutional investors earlier in the year. That placement of 9.9 million shares raised $70 million.

1.07pm: Earlier today it was the materials stocks pushing the market higher. The financials sub index is now at the head of the pack with a 1.37 per cent gain for the day. Materials stocks have slipped slightly to a gain of 0.86 per cent. Here's a list of the leading financials stocks:

• Charter Hall Group: +2.47%
• Goodman Group: +2.31%
• CommBank: +2%
• Perpetual: +2%
• IOOF: +1.65%
• Bank of Queensland: +1.6%

1pm: Here are a couple of items from the small business desk:

• SMEs have lost faith in the government but transport owners are the most fed up in the country
• The four mistakes you are most likely making when it comes to saving

12.55pm: Agribusiness Elders will axe 75 jobs at its Adelaide headquarters before September 30 in a move to cut costs.

Elders said that the size of its ‘‘back office’’ workforce needed to be appropriate for current and anticipated business conditions. Elders chief executive Malcolm Jackman said there would be no cuts to branch network or customer-facing roles.

12.48pm: More here on telecoms. Mobile phone contracts and high-end handsets are getting more expensive as telcos wind back a 2010 price war that saw Australian consumers enjoy generous offers.

Handset subsidies are expected to decrease by as much as 20 per cent in the next six months, while the most heavily-discounted contracts have disappeared.

The price war erupted with Telstra's announcement in mid-2010 that it would try to reverse a long-term decline in its mobile customer base with a mix of lower prices and richer handset subsidies. The tactics worked as it signed up an extra 2.6 million mobile accounts between June 2010 and December 2011. Full story.

12.40pm: Telco reporter Lucy Battersby points out that Telstra shares are trading at $3.99 in today’s strong market. Telstra has not traded at $4.00 since December 2008 when it was excluded from a government tender to build a new broadband network. The government announced in early 2009 it would build a national fibre-to-the-home network and restructure Australia’s telecommunications industry.

Telstra shares reached historical lows on $2.56 in November 2010 as shareholders struggled to understand what role Telstra would play in the NBN world. But prices started rising once the telco announced it planned to work with NBN Co and agreed to structural changes. Earlier this year Telstra signed a multi-year deal with NBN Co worth at least $11 billion at June 2010.

And chief executive David Thodey’s turn-around project has started to gain traction with customer numbers increasing and Telstra becoming more competitive.

The price rise also brings the unfortunate T2 shareholders closer to breaking even. These investors purchased shares from the government for $7.40 at the top of the tech boom in 1999. They have received about $3.26 in dividends since then and will finally break even if they sell at $4.14.

And here's s chart showing share price performance since September 2008

12.24pm: The big miners are enjoying a strong start to the week and could be enjoying some Deutsche Bank analysis which shows BHP Billiton and Rio Tinto may book a non-cash tax credit of between $US1-3 billion each in their June accounts, following the start of the minerals resource rent tax.

The tax credit or "deferred tax asset" will be booked as income - boosting headline earnings but not underlying earnings - and will flow through to the company's balance sheet. Full story.

12.17pm: Here's how a couple of the companies in the news today are performing:

• AGL Energy: down nine cents, or 0.56 per cent, at $15.86
  AGL Energy says Graeme Hunt will join the board as a non-executive director in September

• APN News & Media: up one cent, or 1.85 per cent, at 55 cents
  APN News and Media has named a new chairman and had a lucrative advertising contract with the NSW State Transit Authority bus fleet extended

12.12pm: In other market movements, Hong Kong shares are up 1.3 per cent and stocks in China are up 0.6 per cent.

12.05pm: Engineering firm Transfield Services has won $100 million in new work with resources companies in Western Australia’s Pilbara region.

Transfield says it has signed a one-year contract worth $65 million with Rio Tinto to design and construct a fuel storage terminal in Dampier.

The company was also awarded a $35 million, one-year contract to design and build a diesel storage facility at Fortescue Metals Group’s Solomon mine project.

11.59am: Here are some figures from the HIA which show the contrast in the housing market across Australia.

House sales plunged 9.6 per cent in Victoria and 11 per cent in Queensland in June, while surging 23.5 per cent in Western Australia. They rose 2 per cent in New South Wales in the month.

11.51am: The ASX200 is holding on to its early gains to be up 1 per cent, or 43.4 points, at 4253.2. The dollar, meanwhile, is at $US1.0462.

11.45am: Shares in miner Northern Iron have risen as much as 12.5 per cent after receiving a rival $525 million takeover offer from Swiss trading company Prominvest - one that just tops an earlier bid from Indian conglomerate Aditya Birla Group, Reuters reports.

Shares in the company, which rose 30 per cent last week on the Aditya Birla offer, are up 11.5 per cent at $1.16.

Prominvest has offered $1.42 a share and Aditya Brila $1.40, with both bids indicative and conditional.

11.40am: Tokyo stocks have opened about 1 per cent higher, taking a lead from Wall Street which ended in positive territory last week on hopes for US and European stimulus measures to stoke economic growth.

The benchmark Nikkei 225 index at the Tokyo Stock Exchange opened up 92.19 points at 8658.83.

The Tokyo market shrugged off government figures showing Japan's industrial production unexpectedly edged down 0.1 per cent in June from the previous month, the latest worrying data for the country's lumbering economy.

11.35am: APN News and Media has named a new chairman and had a lucrative advertising contract with the NSW State Transit Authority bus fleet extended.

Peter Hunt, the founder of corporate advisory firm Greenhill Caliburn, will be APN's new chairman from September 3, replacing Gavin O’Reilly, who stood down from the role in April.

The company also says it has been awarded a new five-year contract for advertising on about 2000 buses in Sydney, extending a role it has held since 1987.

11.31am: CMC Markets chief market analyst Ric Spooner says investors have followed international markets this morning, positioning for increased likelihood of action by the US Fed and the ECB.

‘‘However, our market may underperform Friday’s strong rally in US markets,’’ he says.

‘‘Central Banks have now clearly signalled their intention to act. Investors have adjusted their risk outlook in response to this but we may now be closer to the point where investors will need more clarity on the nature and timing of Central Bank initiatives before pushing markets much higher."

11.22am: The ASX is on course – if it retains its 1%-plus advance – for its back-to-back daily gains of more than 1% since the first week of 2012. It rose 1.1% and 2.1% on January 3-4.

11.16am: With talk of stimulus swirling around markets, investors have taken a liking to the big retailers today:

• Harvey Norman: +1.26%
• DJs: +1.67%
• Westfield: +1.33%
• Myer: +1.72%

But Woolworths shares are flat and Wesfarmers shares are down 0.7 per cent.

11.08am: A bit over an hour into the day's trade and stocks are more than 1 per cent higher. A clear majority - 44 per cent - of the 550 votes in this morning's poll predicted the ASX200 would close more than 1 per cent higher. Twenty seven per cent predicted it would close between 0.5 per cent and 1 per cent. Full results are here.

11.03am: The first of this week's housing data releases has arrived and it shows new home sales edged up for the third straight month in June following the Reserve Bank’s most recent interest rate cut.

The Housing Industry Association new home sales report showed a 2.8 per cent rise in new home sales, driven by a 15.7 per cent surge in apartments and townhomes. In May, new home sales rose 0.7 per cent.

‘‘But all the action has been in the multi-unit sector,’’ said HIA Chief Economist, Dr Harley Dale, with stamp duty concessions in the first half of the year in NSW driving a 30.8 per cent increase in apartment units in that time.

‘‘Detached housing, which still accounts for 70 per cent of new housing starts in Australia, was disappointing,’’ said Mr Dale. Standalone houses sales rose by only 0.7 per cent in the month of June, following a 2 per cent decline in May, the HIA said.

10.56am: The big miners are a bit ahead of the market today after big gains in the US on Friday:

• BHP is 1.3% higher to $31.83
• Rio is 1.8% higher to $52.94
• Fortescue is 0.48% higher to $4.17

10.51am: Here's a view on the recent words from various eurozone leaders on bolstering the region's defences against the debt problems. Jeff Sica, chief investment officer of Sica Wealth Management, was sceptical the optimism would be sustained.

"The problem being that central bankers do not have the ability to do 'whatever it takes' to save the euro. They only have the ability to undermine their credibility by making promises they cannot keep," he said, adding that the euro's recent strength has been based on short covering and its short term appreciation would be temporary.

The US central bank also holds a policy meeting on Tuesday and Wednesday, with speculation rising the Fed might do more to bolster recovery, after data showed US second-quarter gross domestic product expanded at a 1.5 percent annual rate, the weakest pace of growth since the third quarter of 2011.

10.47am: IG Markets analyst Cameron Peacock said the Australian market opened stronger following overseas gains and raised hopes that the US Federal Reserve and the European Central Bank might stimulate their economies.

‘‘We had a very strong session in the US and Europe to finish last week and a lot of speculation on stimulus talks with the ECB and the Fed which has really provided the momentum for the back end of last week and carrying us into early this week,’’ he said.

10.41am: CBA has continued to rally, with investors lured by its fat yield and the prospect of $7 billion-plus profits for the year. CBA rose as much as 92 cents, or 1.6%, to $57.10 – a level not reached since mid-May 2010.

The stock is up about 16% in 2012, and is in a neck-and-neck race with smaller rival Westpac for the medal of best performing major bank for the year.

Westpac is up about 15.6%, helped by a gain today of about 0.6% to $23.13 in early trading.

ANZ, meanwhile, boasts a 14% advance, aided by a gain today of as much as 1.2% to as high as $23.25.

NAB, rather like our male swimmers, is languishing in their wake. The stock is up 1.4% today to $24.58 but has a long way to go to overhaul its rivals. The stock is up about 5% in 2012 roughly pacing the overall ASX200.

10.36am: Markets are now approaching a gain of 1 per cent in early trade. Here are the best-performed companies on the ASX200:

• Coalspur Mines: +9%
• Mount Gibson Iron: +4.92%
• Seven Group Holdings: +4.68%
• Bradken: +3.96%
• Cabcharge: +3.53%

10.32am: Amusing comment from 'The Oracle, Oberon':

"I really, really, really, truly, wuly promise to fix things this time."

Latest press release statement from ECB.

10.27pm: The issue of executive remuneration is in the spotlight today, as the Federal court hears a case bought by the Australian Taxation Office against Seven West Media commercial director Bruce McWilliam, over options he was granted when signing on with Seven in 2003.

The two have been in dispute about the vesting date of the options, which, on the ATO's reckoning, means that Mr McWilliam had an extra $443,500 in taxable income in 2003.

Mr McWilliam's position of an earlier vesting date, and no additional taxable income, was upheld earlier this year by the Administrative Appeals Tribunal. The ATO's appeal is being heard by the full court of the Federal Court in Sydney today.

10.22am: Here's a quick list of the best-performed companies on materials on sub-index of the ASX200:

• Iluka: +5.34%
• Sundance: +4.55%
• Alacer Gold Corp: +4%
• Ramelius Resources: +3.5%
• Medusa Mining: +3.02%

10.16am: The materials sub index is leading the market higher with an early 1.33 per cent gain. Here's how the other sub indices on the ASX200 are performing:

• Health: +1%
• Energy: +1%
• Financials: +0.98%
• Consumer discretionary: +0.94%
• Industrials: +0.91%

10.13am: The benchmark S&P/ASX200 index is up 31.7 points, or 0.75 per cent, at 4241.5, while the broader All Ordinaries index is up 29.3 points, or 0.69 per cent, at 4263.7.

On the ASX 24, the September share price index futures contract was up 30 points at 4,203, with 10,198 contracts traded.

10.05am: Early take - shares up 0.5 per cent as markets open.

9.55am: Darryl Conroy, financial markets analyst at Suncorp Bank, said he expected the Australian market to open strongly posting ‘‘20 odd point gains’’.

Mr Conroy says equities will likely stay in a holding pattern until Wednesday’s meeting of the US Federal Reserve but he suspects the Aussie dollar will take an early run on heightened expectations that Fed chairman Ben Bernanke will authorise another round of money printing.

"I expect the Aussie dollar to move up ahead [of equities]," Mr Conroy said. "A couple of days lead up has been the pattern. Market expectations of QE... will push us closer to the 105 mark or even over."

9.48am: Australian bond futures prices have fallen as it looks more likely that euro zone leaders and the European Cental Bank (ECB) will act to solve the region’s debt crisis.

UBS interest rate strategist Matthew Johnson said the ECB needed to act following the bullish talk. ‘‘It really needs to come up and do something new with some sort of bond buying, I guess, to validate the market’s reaction to Draghi,’’ Mr Johnson said.

At 8.30am, the September 10-year bond futures contract was trading at 97.010 (implying a yield of 2.990 per cent), down from 97.090 (2.910 per cent) on Friday. The September three-year bond futures contract was at 97.480 (2.520 per cent), down from 97.590 (2.410 per cent).

9.43am: Locally, the big miners could enjoy a day of strong gains. In US trade to end last week, Rio added 4.48 per cent and BHP added 3.25 per cent.

9.41am: Turning our thoughts to local matters, there are no major economics releases scheduled for today, but here's a quick overview of what we're expecting this week:

• Tuesday: HIA new homes sales for June, ABS building approvals for June
  
• Wednesday: AiG/PWC performance of manufacturing index, ABS house price index for June quarter
  
• Thursday: ABS retail trade for June, RPData-Rismark house price index
  
• Friday: AiG Performance of Services Index

9.38am: Further boosting sentiment, European leaders did their part to bolster confidence in the eurozone's ability to manage the ongoing debt crisis. Following the ECB's "whatever it takes" promise on Friday, Germany and France added their weight to the battle to preserve the European single currency, issuing a joint statement promising to do everything they could to stop the 17-country bloc from breaking up.

The debt-wracked eurozone got further support yesterday when German Chancellor Angela Merkel and Italian Prime Minister Mario Monti "agreed that Germany and Italy will do everything to protect the eurozone".

9.35am: Looking at what helped US markets to a big gain on Friday, new data showed US economic growth slowed in the second quarter as consumers spent at their slowest pace in a year, increasing pressure on the Federal Reserve to do more to bolster the recovery.

That gave investors reasons to hope. The Fed meets on Tuesday and Wednesday this week and although it is expected to leave interest rates unchanged, investors will watch closely for signals that the Fed will engage further stimulus measures.

9.32am: Aussie stocks are set for a strong start global markets closed last week on a high note. We'll have a look at what drove the boost sentiment in a moment. Meanwhile, for a comprehensive look at this morning’s business news check today’s need2know. Here are this morning’s key market links:

• The SPI was 47 points high at 4220
• The $A was trading at $US1.047
• In the US, the S&P500 added 1.9% to 1385.97
• In Europe, the FTSE100 added 0.97% to 5627.21
• Gold rose 0.5% to $US1622.96 an ounce
• WTI crude oil added 74 US cents to $US90.13 a barrel
• RJ/CRB commodities index added 0.7% to 299.6
• Wall St week ahead: Red carpet for central bankers

9.30am: Good morning folks. Welcome to the Markets Live blog for Monday.

This blog is not intended as investment advice

BusinessDay with agencies