By Greg Peel

The Dow closed down 5 points, while the S&P gained 0.2% to 1617 and the Nasdaq added 0.4%.

Wall Street paused to reflect last night after Friday's big jobs number revisions and the historical conquering of 1600 by the S&P 500. There were no US economic releases of note and both Japan and the UK were on holidays, the latter implying no base metal trading. The S&P ticked slightly up into more blue sky, while a 40 point range for the Dow was one of the lowest seen in recent times.

ECB president Mario Draghi spoke in Rome last night, but only reiterated his position made clear after last week's ECB policy meeting; a rate cut was needed due to the eurozone's slowing economy and more action would be taken by the central bank if deemed necessary. It was nevertheless enough to send the euro lower and the US dollar index up 0.3% to 82.33. Gold remained steady at US$1469.90/oz.

It was not so quiet in oil markets where a rekindling of Middle East tensions has traders starting to set for possible supply disruption, or worse. Syria is not an oil producer of note so the endless civil war has had little impact on oil markets to date, but now we have Lebanon's Hezbollah entering the fray to support the Shia government against the Sunni rebels and, more ominously, Israel stepping in to throw its weight around on the other. This heightens the possibility of Iran also joining in the Shia defence. Tehran is probably not stupid enough to tempt Tel Aviv into pushing the red button, but the chances of disruption to oil production and supply have grown.

Brent crude rose US$1.24 to US$105.24/bbl, being more closely aligned to Middle East supply, while West Texas added US22c to US$95.83/bbl.

Spot iron ore is unchanged at US$128.10/t.

Yesterday HSBC announced its service sector PMI for China had fallen to 51.1 in April from 54.3 in March, while the eurozone's equivalent actually ticked up for once, to 47.0 from 46.6.

Yesterday's Australian data releases sparked further speculation of a rate cut from the RBA today, and hence sent the Aussie down 0.6% to US$1.0253. The highlight was a 0.4% fall in retail sales in March following strong gains in the previous two months. The ANZ job ads series showed a 1.3% fall in ads in April.

These numbers alone might hint at a cut, but in the wider picture, retail sales rose 2.2% for the March quarter. Job ads are down 18.2% year on year, but the RBA is well aware of softness in the jobs market, while a 0.3% gain in TD Securities' headline inflation gauge suggests deflation is not on the cards. TD's measure has annual inflation running at 2.1%, which is just inside the zone. Despite weakness in recent building approvals, manufacturing and service sector data (and construction is out this morning), the RBA has been projecting further afield to offshore economies in recent statements to note apparent recoveries in China and the US. Reason enough not to cut.

Those economies have now appeared to slow again (US jobs notwithstanding), which strengthens the rate cut argument, but 70% of Australian economists believe the RBA will wait until June when the major March quarter data is in. Money markets are "predicting" a cut, but this is largely a media-driven misconception. Money markets are hedging against a cut, which has less sensational implications.

The SPI Overnight was up 13 points, or 0.2%.

Along with the construction PMI, an index of first quarter house prices is out locally today as well as the March trade balance. More fodder for the RBA, but unlikely to tip the balance.

Rudi will appear on Sky Business this evening at 5.30pm.