What you need2know

SPI futures up 19 points at 5024

AUD at 70.09 US cents, 84.02 Japanese yen, 63.01 Euro cents and 45.94 British pence

On Wall St, S&P 500 +0.1%, Dow +0.1%, Nasdaq -0.4%

US markets will be closed on Monday for a holiday

In Europe, Stoxx 50+2.2%, FTSE +1.8%, CAC +2.2%, DAX +2.7%

In London, BHP Billiton +4.3%, Rio Tinto +3.3%

Spot gold down $US8.49, or 0.8% to $US1125.56 an ounce

Brent crude up 28 US cents, or 0.6% to $US50.78 a barrel

Iron ore slips 0.4% to $US56.50 per tonne

What's on today

Australia tourist arrivals; Germany factory orders; France consumer confidence; Canada unemployment; US non-farm payrolls.

Stocks in focus

Bell Potter maintains a "buy" recommendation on QBE Insurance and a price target of $15.50 a share. "QBE's significant share price pullback in the past month appears overdone especially on the eve of US monetary policy normalisation."

Citi raised IOOF to "buy" from "neutral" with a price target at $10, up from $9.80 a share. "Marking to market our FuMA forecasts we lower our EPS: FY16E: -2 per cent, FY17E: -3 per cent. The stock now offers an attractive yield and reasonable EPS growth profile and, if there is no additional fallout from the recent spate of issues surrounding the company's reporting and compliance framework, we believe the stock should perform reasonably well."

Trading ex dividend today: APN Outdoor, Adacel Technologies, Blackmores, Caltex Australia, Canterbury Surrey Hills, Cardno, MMA Offshore, Oil Search, Phileo Australia, Ramsay Health Care, Saunders International, Service Stream, SpeedCast International.

Currencies

The euro fell more than 1 per cent, surrendering most of the gains it made against the dollar following China's devaluation of the yuan last month, after European central bankers cut economic growth targets and left interest rates unchanged." Draghi at his press conference raised the risk of additional monetary support by the central bank," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "We were expecting some dovish comments, and he delivered."

During Draghi's news conference, the euro dropped 1.4 per cent against the US dollar to touch a two-week low of $US1.1108. It was last off 0.90 per cent at $US1.1122 after earlier this week reaching a high of $US1.1332 as investors spooked by markets turmoil in China moved heavily into the euro and yen. The euro also sank against the yen and was last down 1.1 per cent at 133.48 yen. The greenback was also up against most other major currencies, with the dollar index last ahead 0.60 per cent. The dollar declined 0.20 per cent against the yen to 120.09 yen.

Futures traders are betting the Fed will push back raising its fed funds rate. The probability of an increase in September has fallen to 28 per cent, from 38 per cent at the end of last week, according to data compiled by Bloomberg. The figures are based on the assumption that the benchmark will average 0.375 per cent after the first rise.

Commodities

Iron ore exports to China from Australia's Port Hedland climbed to a record last month as suppliers increased output through the world's largest bulk-export terminal. Shipments rose 15 per cent to 33.9 million metric tons from 29.5 million tons in July and compared with 32 million tons a year earlier, according to data from the Pilbara Ports Authority. Total iron ore exports reached 39.2 million tons, also an all-time high, from 35.3 million tons a month earlier and 37.4 million tons in August 2014, the data showed.

Copper surged to the highest level in over three weeks as bearish investors closed out positions. Three-month LME copper closed up 2.5 per cent at $US5246 a tonne after reaching an intraday peak of $US5314, the highest since August 11. Copper, which gained 1 per cent on Wednesday, has recovered after sinking to six-year lows early last week of $US4855. It was the best performer in the base metals complex partly due to a fall in available LME inventories, analyst Leon Westgate at ICBC Standard Bank said. "A sharp fall in on-warrant inventory is adding to a sense of tightness in the nearby spreads and sparking further short covering interest," he said in a note.

Nickel climbed 2 per cent to finish at $US10,000 a tonne, shrugging off news that Indonesia was still considering whether to allow firms with smelters to export ore as part of a package of incentives intended to spur growth in the sector.

United States

A 200-point rally in the Dow Jones Industrial Average faded in afternoon trading as optimism about European stimulus gave way to anxiety over Friday's jobs report and its implications on Federal Reserve interest-rate policy. US equities ended the day little changed, with attention focused on tomorrow's payrolls data that will provide the last major clue on the economy's strength before the Fed meets.

Thursday's market retreat coincided with the release of research from a JPMorgan Chase & Co strategist arguing that robotic selling by quantitative investment funds tuned to volatility and price trends, which contributed to last month's losses in US stocks, is only about halfway completed. Marko Kolanovic said such traders probably have to get rid of another $US100 billion in stocks in the next one to three weeks. On August 27, Kolanovic warned in a similar note that "price insensitive" program traders are likely to cause repeated selloffs.

The monthly US nonfarm payrolls data, to be released on Friday morning in Washington, is expected to show that the economy added 220,000 nonfarm jobs in August, up from 215,000 in July.

The Commerce Department said the trade gap narrowed 7.4 per cent to $US41.9 billion, the smallest since February. When adjusted for inflation, the deficit fell to $US56.2 billion from $US59.0 billion in the prior month. The politically sensitive US-China trade deficit was $US31.6 billion in July, up 0.4 per cent from June. That trade gap will be closely watched in the coming months in the wake of China's recent devaluation of its currency.

Europe

For European stock investors seeking assurances of central-bank support after China-fueled volatility rocked global markets, Mario Draghi didn't disappoint. All 19 Stoxx 600 groups climbed, with miners rallying the most. Glencore Plc and Anglo American Plc each gained at least 6 percent.

A gauge of services and manufacturing in the euro area climbed to a four-year high in August, a Markit report showed. With Chinese exchanges closed for a holiday, investors also got a respite from market moves there.

All 19 Stoxx 600 groups climbed, with miners rallying the most. Glencore and Anglo American each gained at least 6 per cent.

What happened yesterday

The Australian sharemarket suffered another dramatic turnaround after an early rally quickly turned sour, as disappointing economic data directed investor attention to domestic issues. At close of trade on Thursday, the benchmark S&P/ASX 200 ended 74 points or 1.4 per cent lower to 5027.8, while the broader All Ordinaries closed 71 points down to 5048.6.