Local stocks set for flat start despite late buying helping to lift the S&P 500 to a fresh closing high.

What you need2know:

• SPI futures up 2 points to 5419

• AUD at 93.99 US cents, 95.83 Japanese yen, 69.10 Euro cents and 55.17 British pence

• On Wall St, S&P 500 +0.1%, Dow +0.1%, Nasdaq -0.1%

• In Europe, Euro Stoxx 50 +1.1%, FTSE +0.4%, CAC +0.7%, DAX +0.7%

• LME copper 3-month is at $US6710 a tonne

• Spot gold surges 3.1% to $US1317.85 an ounce

• Brent oil up 0.7% to $US115.02 per barrel

• Iron ore adds 0.4% to $US90.70 per metric tonne

What’s on today

Europe: June consumer confidence, April current account; 

Germany: May PPI; 

UK May public sector net cash requirement; 

Canada: retail sales, CPI.

Stocks to watch

Citi’s retail analysts have weighed into the debate around Solomon Lew’s intentions for David Jones, coming up with a list of four possible motivations.

Singapore-listed Linc Energy is pushing ahead with plans to sell its Australian coal assets, organising meetings with potential trade and private equity buyers for next week.

Macquarie Research has maintained an “underperform” recommendation on Woodside Petroleum and a 12-month price target of $39 a share.

Deutsche Bank has retained its “sell” recommendation on Metcash with a target price of $2.60 a share.

Currencies

Nomura still expects USD/JPY to appreciate, but “we now think the appreciation will start to accelerate slightly later than we expected three months ago”.

“Our economists now expect the BOJ to ease in October at the earliest, not in July, as inflation momentum has been stronger than expected. In addition, US yield movement in Q2 was less supportive for USDJPY appreciation. Thus, we lower our end-June forecasts to 104 from 107.”

The Norges Bank warned it might have to cut borrowing costs to aid its economy, which has struggled recently. This dashed expectations of higher rates and ignited frantic selling of the Norwegian crown. The euro booked a 2 per cent gain, its biggest single-day rise in a year against the Norwegian currency, at 8.3316 crowns. 

Commodities

US regulators on Thursday approved Sempra Energy’s bid to build a liquefied natural gas export terminal in Louisiana, opening the door to a significant expansion of the American role in global gas trade.

Private sector gold demand in China, which last year surpassed India to become the world’s biggest consumer of the yellow metal, will be flat to slightly lower this year, Xin Song, president of the China Gold Association, said.

Zinc prices touched their highest in 16 months after data showed a rising market deficit, and investors expect the figure to grow further as major mines shut down. Three-month zinc on the London Metal Exchange hit a high of $US2155 a tonne in heavy volume, the strongest since February 20, 2013, before closing at $US2153, up 0.84 per cent.

United States

The S&P 500 ended at another record high on Thursday, extending gains for a fifth day on optimism that the Federal Reserve will keep interest rates low.

Apple will begin mass production of a smartwatch in July and begin selling it in October, sources have told Reuters, with a plan to ship 50 million in the first year. Shares in Apple were down 0.8pc in afternoon trading.

Initial claims for state unemployment benefits slipped 6000 to a seasonally adjusted 312,000 for the week ended June 14, the Labor Department said. The four-week moving average for new claims fell 3,750 to 311,750, not far from a seven-year low touched in May.
Separately, the Philadelphia Federal Reserve Bank said its business activity index jumped to 17.8 this month, the highest level since September, from 15.4 in May.

Europe

European stocks rallied on Thursday, with one blue-chip index near a six-year high. The Euro STOXX 50 Volatility index, Europe's main "fear gauge", tumbled 8.4 per cent to 12.7 - a level not seen since 2006.

Shares in French utility EDF sank 7.7 per cent after Energy Minister Segolene Royal said a five per cent tariff increase scheduled for August 1 would not be applied. The drop wiped out €3.8 billion in market value.

German Finance Minister Wolfgang Schaeuble warned in the clearest terms yet about the risks of loose monetary policy for Europe’s largest economy, saying low interest rates were already spawning “dangerous” rises in domestic property prices.

What happened yesterday

Australian shares posted their biggest daily jump in seven months amid a rally in global equities after the US Federal Reserve provided reassurance it plans to keep its monetary policy supportive for many months to come.

The benchmark S&P/ASX 200 Index jumped 85.5 points, 1.6 per cent, to 5468.2, while the broader All Ordinaries Index added 1.5 per cent to 5446.4.