Aust stocks set for cautious start

AUSTRALIAN stocks look set for a quiet start to the trading week ahead of the US elections and a Melbourne Cup day interest rate decision.

CommSec chief economist Craig James says the battle for the White House between Democratic president Barack Obama and his Republican challenger Mitt Romney will be at the front of investors' minds on Monday.

Before Americans go to the polls on Wednesday (AEDT), the Reserve Bank of Australia is due to hold its monthly board meeting on Tuesday, Melbourne Cup day.

"I think the market is going to be super, super cautious," Mr James said on Sunday.

"There are so many uncertainties ahead.

"You are not going to take too many positions ahead of that."

Futures markets were pointing to a weak start on the local market, with the December share price index futures contract down three points at 4,442 points on volume of 5,644 contracts.

Some 12 of the 15 economists surveyed by AAP said they expected the central bank to cut the cash rate by 25 basis points to three per cent.

In other domestic news, the Australian Bureau of Statistics is due to release local jobs numbers and the RBA is scheduled to publish its quarterly statement on monetary policy.

In companies news, full year results are due from Westpac Banking Corporation, while first quarter profit numbers from Rupert Murdoch's News Corporation and a September quarter trading update from Commonwealth Bank of Australia are also slated for publication.

"There's plenty of fodder for investors to feed off and a lot of these things could go either way," Mr James said.

"It is a case of just finding out what the outcome is, interpreting it and moving forward from there."

Wall Street traded higher during the early part of Friday night's (AEDT) session in response to better-than-expected US jobs figures before fading into the close as nervousness over the upcoming US elections took over.

The Dow Jones Industrial Average fell 1.05 per cent, the S&P500 eased 0.94 per cent and the NASDAQ ended 1.26 per cent lower.

The non-farm payrolls report showed the world's largest economy added 171,000 jobs in October, well above market expectations of a 120,000 gain.

The Australian dollar closed the US trading day at 103.37 US cents, down from Friday's local close of 103.85 US cents.

The Australian stock market closed flat on Friday - the benchmark S&P/ASX200 edged up 0.05 per cent and the broader All Ordinaries index rose 0.07 per cent.

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