What you need2know

SPI futures down 1pt at 5206 on Monday morning

AUD at 71.95 US cents on Monday morning

On Wall St on Friday, S&P 500 -1%, Dow -0.1%, Nasdaq -0.2%

In Europe, Stoxx 50 -0.3%, FTSE -0.3%, CAC -0.3%, DAX -0.2%

Spot gold down $US14.87 or 1.4% to $US1057.46/oz in NYC on Friday

Brent crude down 60 US cents or 1.3% to $US44.86/bbl in NYC on Friday

What's on today

Australia business indicators, monthly inflation gauge, private sector credit; Japan industrial output, retail trade; German inflation; US pending home sales

Stocks in focus

Brazil's federal and state governments plan to sue BHP Billiton and Vale, the owners of the Samarco iron ore miner, for 20 billion reais ($7 billion)in damages caused by the burst of a tailings dam, Environment Minister Izabella Teixeira told reporters on Friday.

Consumer electronics industry growth continues to run at elevated levels, says Macquarie Wealth Management, underpinned by telco, appliances and the depreciating AUD. "JB Hi-Fi (JBH) has for some time been our preferred discretionary retailer."

UBS raised Select Harvests to a "buy" recommendation from "neutral" and put a 12-month price target of $13.65 on the stock, up from $13.05 previously.

Currencies

The 19-nation euro is heading for its biggest monthly loss since March versus the US dollar as monetary policy diverges between the ECB and the Federal Reserve. A cut of 10 basis points to the euro area's deposit rate is fully priced in, according to futures data compiled by Bloomberg, which also shows a 15 basis-point cut is more than 90 per cent priced in. The euro was at 130.16 yen on Friday, set to complete a seven-week slide of almost 5 per cent. Europe's common currency was at $US1.0595, down 3.7 per cent since October 30. It slid to $US1.0566 on Wednesday, the lowest since April.

Sam Choucair at AFEX: "The euro has weakened 10 per cent against the AUD and 5 per cent versus USD in the past two months in anticipation. Euro buyers beware: last time the ECB weakened policy the euro gained 4 per cent in the days straight after the meeting; 10 per cent in the ensuing two months."

The greenback climbed as much as 0.3 per cent against a basket of 10 currencies on Friday to near the highest since at least 2004. Odds that the Federal Reserve will increase rates next month for the first time since 2006 advanced to 72 per cent on Friday, from 35 percent a month ago, Fed-fund futures data show. Bets on higher rates have risen as a resilient US labour market powers consumer spending, adding to signs that the economy may be robust enough to withstand higher rates. "We haven't seen the dollar at these levels for a very, very long time," Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. "The market is expecting the Federal Reserve to be fully on the bandwagon."

Commodities

Nickel fell for the first time in four days after smelters in China vowed to curtail output from next month, underscoring scepticism among investors on whether cutbacks by the world's biggest producer are able to make a dent in the global glut. Three-month nickel slid 5.5 per cent to an intraday low of $US8685 a tonne. It pared losses to close 4.5 per cent weaker at $US8775. Nickel had slumped to $US8145 on Tuesday, the lowest in more than a decade, and has been the worst performing LME base metal this year, sliding 42 per cent.

LME copper finished down 1.4 per cent to $US4573 a tonne, holding above its low of $US4443.50 struck on Monday, its weakest since May 2009.

Half of the gold coming from mines may not be viable at current prices, underscoring the industry's need for consolidation and output cuts, according to the best- performing producer of the metal in the past decade. "The more we continue to produce unprofitable gold, the more pressure we put on the gold price," said Randgold Resources CEO Mark Bristow. "In the medium term, it's a very bullish outlook for the gold industry. The question is, how long are we going to supply it with unprofitable gold?"

United States

The Standard & Poor's 500 Index closed little changed for a fourth straight day amid declines in energy and Walt Disney shares, while a gauge of small-cap stocks posted its longest winning streak in eight months. In a shortened trading session following the Thanksgiving holiday, Disney was a drag after saying ESPN subscriptions declined 3 per cent in its last fiscal year.

Seven out of 10 major S&P sectors rose slightly.  Trading volume was modest, with 2.79 billion shares changing hands on US exchanges, compared with the 7 billion average for the previous seven sessions. Most traders extended their weekend after taking Wall Street was closed on Thursday.

"We're going to get today over with and hit the ground running next week," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago. Battle expects a busy start to this week as investors prepare for a Dec. 4 non-farm payrolls report that may bring volatility ahead of a widely expected decision by the Federal Reserve to raise interest rates at its mid-December meeting.

Europe

European shares recovered from most earlier losses after better-than-expected confidence data offset concerns about China's slowdown. The Stoxx 600 fell 0.2 per cent at the close of trading, paring a decline of as much as 0.7 per cent after a report showed economic confidence in the euro area matched its highest level in more than four years. The Stoxx 600 posted a weekly advance of 0.5 per cent, with the number of shares changing hands today about a third lower than the 30-day average.

The data come as the European Central Bank prepares to make a decision on whether to increase stimulus. Speculation of an increase, plus optimism that the global economy is strong enough to withstand higher US interest rates, fuelled a 13 per cent rebound in stocks from a low in September. "Improving euro-area confidence and a weaker euro are good for European companies," said John Plassard, a senior equity- sales trader at Mirabaud Securities LLP in Geneva. "Everybody is waiting for the ECB meeting next week to determine if Mario Draghi will deliver or not. There's lots of nervousness."

A gauge of miners slumped the most of the 19 industry groups on the Stoxx 600 as commodity prices slid. Anglo American tumbled 8.2 per cent to a record low, Rio Tinto Group slid 3.2 per cent and BHP Billiton lost 3.1 per cent.

In London, banks added to the losses before the Bank of England gives the results of its stress tests this week. Standard Chartered, which is facing the highest hurdles, dropped 1.3 per cent on Friday.

What happened Friday

Australian shares suffered a weekly loss led by a slide in market heavyweight BHP that, together with the ongoing malaise in commodities, weighed very heavily on the materials sector. The week also witnessed massive destruction of shareholder value at law firm Slater and Gordon, with three-quarters of its market capitalisation being wiped out following legislative changes in the UK.

Initially on Friday, the market was headed for a small weekly gain following strong leads from overseas, but sentiment faded over the course of the session. The ASX200 finished 0.1 per cent lower on Friday and 1 per cent lower for the week at 5202.6, while the All Ordinaries slipped 0.1 per cent for the day and 1 per cent for the week to 5251.4.

BHP Billiton dropped 0.9 per cent on Friday and 8.4 per cent for the week amid growing concerns about the company's ability to maintain its progressive dividend policy and the continuing fallout from the Samarco dam disaster in Brazil. The lawsuit by Brazil was reported after the close of trading in New York on Friday.