Despite good leads from European markets, falling commodity prices and weaker US productivity are expected to dampen investor enthusiasm today. However the major market factor will likely be company results, with Australia’s largest company, CBA, delivering results this morning.

CBA’s record profit suggests the underlying economy remains modestly positive. Growth of around 3% in underlying profit is good news, although the fact cash profit missed forecasts by 1-2% may see the share price under pressure at the open. Similarly, OZ Minerals, AGL and Computershare may suffer investor wrath today as mixed to poor operating results are further marred by heavy write downs.

CBA’s margin compression of 2 bps is a significant negative, given ANZ’s flat report yesterday. Analysts will ponder whether this is evidence of industry pressure or a competitive slip from CBA. Adding colour will be the late morning release of home lending data. If June shows forecast growth of 2.3% CBA may see support given growth above that rate.

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