What you need2know:

• SPI futures up 10 pts at 5436

• AUD at 87.07 US cents, 101.50 Japanese yen, 69.98 Euro cents and 55.71 British pence.

•  S&P 500 +0.1%, Dow +0.1%, Nasdaq -0.4%

• In Europe, Euro Stoxx 50 +0.8%, FTSE +0.3%, CAC +0.6%, DAX +0.6%

• Spot gold falls 0.1% to $US1186.28 an ounce

• Iron ore slips 0.5% to $US75.08 per metric tonne

• Brent oil down 0.5% to $US79.12 per barrel

What’s on today

Australia Roy Morgan weekly consumer sentiment, Reserve Bank of Australia board minutes, Speech by RBA governor Glenn Stevens tonight in Melbourne; Japan Bank of Japan policy meeting; US producer prices, housing market index; UK CPI.

Stocks to watch

China Communications Construction Co’s talks with Leighton Holdings over the potential purchase of John Holland may pick up steam now the free-trade agreement with China has been signed, according to the Australian Financial Review's Street Talk column.

Deutsche Bank has retained a “buy” rating on GrainCorp and a $9.40 share valuation and said it viewed the above market FY14 result as a slight negative for the company (but largely priced in) as it highlights the challenges the company is facing in FY15 with another below normal season.

RBC Capital Markets has upgraded its recommendation on Mineral Resources to “outperform” from “sector perform” and has a $10 a share price target, down from $11 a share previously.

Currencies

The Australian dollar has witnessed some surprising resilience over the past week with it posting modest gains against most of its peers, says David de Ferranti, market analyst at FXCM. Downside risks for AUD/USD are centred on the pair’s recent lows near 0.8550, while gains are likely to encounter selling pressure at the 0.8880 ceiling, he said.

The Japanese yen has steadied against the US dollar, pulling back from a fresh seven-year low, as the news set the stage for Prime Minister Shinzo Abe to delay an unpopular sales tax hike and call an election two years before he has to.

Commodities

Top Russian oil producer Rosneft's CEO Igor Sechin will fly to Vienna on November 25, just two days before the Organisation of the Petroleum Exporting Countries meets in the city to debate the plunge in oil prices. The surprise announcement from the state-backed firm raised speculation that Sechin, a close ally of President Vladimir Putin, will discuss coordinating with OPEC to try stem the near 30 per cent drop in oil prices since June.

Gold retreated from a two-week high hit as the US dollar rose on news that Japan had slipped into recession, and strong technical resistance could also further limit bullion's gains in the near term, analysts said. "The next technical hurdle for gold will be its 50-day moving average, which has been acting as its stubborn resistance in the last few months," said Adam Sarhan, CEO of Sarhan Capital in New York.

Copper and other base metals dipped on news that Japan had slipped into recession, but nickel, aluminium and lead recovered and closed higher, supported by forecasts of developing shortages.

United States

US stocks were near flat Monday afternoon as deal activity in the energy and healthcare sectors offset concerns about overseas growth after Japan's economy slipped into recession.

Allergan has accepted a $US66 billion takeover bid from Actavis, closing the door on a hostile offer from activist investor William Ackman and Valeant Pharmaceuticals International.

Halliburton said it will buy Baker Hughes for about $US35 billion in cash and stock, creating an oilfield services behemoth to take on Schlumberger as customers curb spending on falling oil prices.

Factory production increased 0.2 per cent last month, the Federal Reserve said. September’s increase in factory output was revised down to 0.2 per cent from 0.5 per cent. Motor vehicle output fell 1.2 per cent in October

Economists trimmed their forecasts for US economic growth in the fourth quarter but slightly raised their expectations for the balance of 2014 on an improved outlook for the labour market. Analysts see the economy growing at an annual rate of 2.7 per cent in the current quarter, according to the Philadelphia Federal Reserve’s quarterly survey of 42 forecasters.

Europe

The European Central Bank’s stimulus is gaining traction, but should it turn out that its current efforts are not sufficient to accelerate the euro zone recovery, the ECB is ready to do more, ECB president Mario Draghi said.

European shares reclaimed early losses from Japan's poor economic performance to close higher on Monday on bets Draghi will begin buying sovereign bonds sooner than later.

The Bank of England said senior bankers’ salaries may in future be at risk if they or their staff break rules, firing a warning shot to the City after the latest dealing room scandal cost six banks $US4.3 billion in fines.

What happened yesterday

Weakness in the big four banks and shock news that Japan’s economy had entered into recession drove the local sharemarket lower on Monday.

The benchmark S&P/ASX 200 Index dropped 42 points, or 0.8 per cent, to 5412.5. The broader All Ordinaries Index fell 37 points, or 0.7 per cent, to 5396.6.