US markets began their session well but fell away as investors focussed on softer expected earnings in the healthcare sector.
With the Dow having made good gains over the week, profit taking took hold before a swathe of earnings reports due out in the next few days.
The Dow fell 0.2%, the S&P500 was down 0.4% while the Nasdaq fell 0.6%.
In Europe the mood was brighter with the FTSE rising 0.5% and the Dax up 1.9%. There appears to be increased optimism regarding some form of deal regarding the Greek debt situation.
There was little movement in interest rates over night. US 10 year government bond yields rose one basis point to 1.92%.
There was little data to move markets. In Australia, long bond yields drifted 3 basis points lower to 2.50% and 3 year government bond yields fell 4 basis points to 1.86%.
The US dollar index fell slightly to a three-week low with the euro lifting marginally in the wake of increased optimism regarding a deal on Greece's debt.
After a bout of weakness mid-afternoon yesterday, the AUD rebounded early in the New York session to move back well into the US 78 cent range.
Gold recovered its losses of the previous day moving back above US$1200 per ounce as traders believe the Fed may delay lifting US interest rates.
Copper also firmed and US oil prices rose 2.5% as the US drill rig count continued to decline - an indication of reduced US supply.
No data of significance was released yesterday.
Today the Governor of the Reserve Bank of Australia speaks at a conference in Sydney at 8.40am. The latest figures on house prices will be released on Friday.
Industrial profits fell 0.4% in the year to March.
First quarter industrial profits declined 2.7% from a year earlier, reflecting the slower pace of economic growth in the March quarter.
Following difficulties in discussions with its creditors, the Greek Prime Minister Alexis Tsipras appears to have curtailed the role of his Finance Minister Yanis Varoufakis.
The reshuffle lifted expectations that a deal could be struck before Greece runs out of cash to make its next tranche of loan repayments.
The US services PMI, which came in at 57.8 in April, disappointed consensus (58.8), as did the Dallas Fed's index of manufacturing activity which came in at -16.9 versus an expectation -12.0.
A silver lining in the Dallas Fed report was the rise in the employment component, even as Texas remains affected by the declines in energy prices.
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