The ASX December half results season has been far from a disaster, but there are signs of problems ahead.
A surprise slump in US pre-Christmas retail sales renews fears the world's biggest economy is joining a worsening global economic slowdown and sinks Wall Street.
Wall Street rises again on renewed hopes the US and China can resolve their trade war, with reports China's President will himself meet an American delegation tomorrow.
New hopes of a breakthrough in the trade impasse between the US and China see global markets surge, while Wall Street also gets a boost from a potential deal to avoid another US Government shutdown.
Wall Street again has a lacklustre session, but Australian shares are poised for moderate gains on surging iron ore prices as Chinese traders return from Lunar New Year holidays.
US and European markets are a sea of red, as analysts downgrade growth forecasts for the continent and a US Government official plays down the prospects of a China-US trade deal by a March 1 deadline.
The Australian dollar falls sharply after the Reserve Bank governor concedes there is a "roughly equal" chance the next move in interest rates might be a cut due to growing economic risks.
The local share market is expected to open moderately higher, ahead of a key speech by the Reserve Bank governor on the risks ahead for the economy in 2019.
Analysts say the banking royal commission's final report won't cause "upheaval" in the finance industry, with Australian shares expected to push higher in early trade now that the market has digested Kenneth Hayne's findings.
For more than six months the Reserve Bank has maintained the next move in rates is up. That could change this week.