What you need2know:

• SPI futures down 35pts at 5355

• AUD at 83.06 US cents

• Late on Wall St, S&P 500 -1%, Dow -0.7, Nasdaq -1.2%

• In Europe, Euro Stoxx 50 -0.9%, FTSE -1%, CAC -1%, DAX -0.7%

• Spot gold up $US12.91 to $US1205.26 an ounce

• Brent oil slides $US2.62 or 3.8%, to $US66.45 per barrel

What’s on today

NAB November business conditions, business confidence; UK October manufacturing output.

Stocks to watch

Banks, Qantas, Virgin Australia.

Eighty-billion dollar industry fund AustralianSuper wants to own a piece of NSW and Queensland’s up-for-sale power networks and is preparing to go to auction alongside two giant Canadian funds, according to the Street Talk column in the Australian Financial Review.

UBS has a “buy” on Harvey Norman and said HVN “remains our top-pick amongst the discretionary retail names”. It has a 12-month price target of $3.80 on the stock.

Deutsche Bank maintains a “sell” recommendation on Newcrest Mining and has a price target on the gold miner of $8.10 a share.

Currencies

Stephen Innes, senior trader at OANDA Asia Pacific says that the release of Australia’s employment report on Thursday is the major event local traders will be focused on this week, with the AUD/USD on the backfoot since the release of stronger than expected US jobs data last week

The greenback slid from a seven-year high against the yen and a two-year peak versus the euro, though the US dollar’s outlook remained upbeat. Investors were already looking ahead to the December monetary policy meeting of the US Federal Reserve next week. “We’re drifting off in the dollar and this is just consolidation,” said Shaun Osborne, chief currency strategist at TD Securities in Toronto.

Commodities

World oil prices slid another 4 per cent to new five-year lows, as expectations of a deeper slump next year and a prediction by a core OPEC member, Kuwait, that crude will remain at $US65 for several months triggered another round of selling.

Morgan Stanley set a new bar for bearishness on Wall Street, slashing its average 2015 Brent base-case outlook by $US28 to $US70 per barrel and warning that prices could drop as low as $US43 a barrel next year. “Without OPEC intervention, markets risk becoming unbalanced, with peak oversupply likely in the second quarter of 2015,” Morgan Stanley analyst Adam Longson said.

United States

US stocks declined on Monday afternoon, dragged lower by a big drop in energy shares and global growth concerns.

The Standard & Poor’s 500 Index will climb 3.6 per cent from last week’s close to 2150 by the end of 2015, Peter Sullivan and a group of four other HSBC strategists wrote on Monday in a client note. S&P 500 earnings will grow 9 per cent next year, they said.

US economic growth is expected to pick up next year, driving down the unemployment rate, but inflation is seen slowing slightly, according a survey published Monday by the Federal Reserve Bank of Chicago.

ConocoPhillips said it would cut its 2015 capital budget by 20 per cent, or about $US3 billion, compared with this year, marking the biggest spending cut by a US oil and gas company in dollar terms as global oil prices hit five-year lows.

Europe

European shares fell on Monday, trimming some of the previous session's sharp gains after Italy's sovereign debt rating was cut late on Friday and following soft economic data from China and Japan.

Euro zone finance ministers are in favour of granting Greece a two-month extension of its bailout program, which Athens will ask for on Tuesday, Eurogroup chief Jeroen Dijsselbloem said.

Euro zone finance ministers told France and Italy to take quick steps to rein in their deficits in line with EU rules, threatening disciplinary action but also indicating some wiggle room might be given.

What happened yesterday

A rally in bank stocks following the release of the final report from the financial system inquiry, and a falling currency, pushed the sharemarket higher on Monday despite continued weakness in the resources sector after the oil price sank again.

The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each gained 0.7 per cent, on Monday to 5372.7 points and 5348.9 points respectively with the big four banks leading the charge.