Global markets remained in low volatility limbo but the Australian sharemarket dropped to test short term support as domestic austerity and slowing Chinese growth weighed on sentiment.
The S&P/ASX 200 index opened in the black but dropped to close 12.4 points, or 0.23 per cent, down at 5448.4 after Chinese officials knocked back hopes for stimulus measures.
On Friday spot iron ore dropped 0.9 per cent to $US102.70 a tonne and today Dalian iron ore futures lost another 0.5 per cent after Chinese President Xi Jinping said the nation needed to adapt to a "new normal" in the pace of economic growth and remain "cool-minded".
The Shanghai composite index was up 2 per cent at the close off the ASX on speculation authorities would ease trading and shareholding restrictions on foreign investors.
In Tokyo the Nikki index was of 0.2 per cent after Japan's current account surplus shrank to a 30 year low and the trade deficit doubled following as 23 per cent rise in imports and 6 per cent increase in exports.
The Australian dollar was steady at US92.60¢ as the US dollar extended its rally again most major currencies.
Governmetn10-year yields rose 1.9 per cent to 3.84 per cent after global benchmark US 10-years rose 3 points to 2.63 per cent.
On Friday data showed US inventories rose 1.1 per cent in March, the fastest pace since October to undermine June-quarter forecasts, while German exports fell 1.8 per cent.
ANZ strategist Kerry Duce said despite the lift in developed economy momentum through 2013, activity continued to fall well short of closing still large developed economy output gaps and consumer and wage inflation should remain below trend.
"This environment will keep developed central banks on hold or provoke further action as inflation remains subdued, although a recovery in the industrial cycle could lift upstream prices towards end 2014," he said.
Gold recovered from an early dip to $US1283 an ounce and was trading unchanged at $US1290 an ounce while copper rose one per cent to $US680 a tonne.
Among the banks, CBA was off 12¢ to $79.38, Westpac was down 2¢ to $34.90, ANZ was also down 4¢ to $32.68 and NAB fell 20¢ to $34.18.
BHP Billiton pared early losses to close 18¢ off at $37.16, while Rio Tinto firmed 5¢ to $61 and Fortescue Metals lost 9¢ to $4.72.
Telstra was off 1¢ to $5.21.
Among the retailers, Wesfarmers gave up 1¢ to $42.85, Woolworths dropped 27¢ to $36.57, Myer gave up 2¢ to $2.11 and David Jones withdrew 1¢ to $3.94.