The expiry of the quarterly share price index (SPI) futures contract this morning will see huge volumes of shares change hands. There is high potential for the largest institutional investors to take advantage of this surge in liquidity to re-shape their portfolios. This makes predicting the outcome of today’s trading exceedingly difficult.

Overnight markets diverged. Shares in Europe and the US fell modestly. Although US rates fell across the board, bond curves continued to steepen. This suggests markets are expecting no change to rates this month, inducing higher levels of inflation later. The big mover is oil, down hard despite a surprise drop in crude stockpiles. Traders focussed instead on an increase in oil distillates, which surged 4.6 million barrels over the week. The Energy sector is once again likely to lead the local bourse lower.

Myer will report its first yearly result under new chief executive Richard Umbers. Expectations are around earnings per share of 9 cents. This could justify the almost 50% rally in Myer’s share price over the period. However, there are very large short sold positions in Myer, and any results above expectations could bring explosive share price action