A strong day for commodity stocks on further news of oil output cuts was not enough to lift the ASX to the 5500 level.

Shares in takeover target UGL continued to trade above the offer price of $3.15 put on the table Monday by the Spanish-controlled CIMIC.

Rising talk of fiscal reform and the end of QE has seen over the 10-year government bond yield surge from 1.908 per cent to 2.246 per cent in 10 days.

To hear analysts tell it, the earnings recession is about to reach 18 months.

Some companies gained as the pound plunged last week as the market keeps a wary eye on Brexit developments.

The world has changed to the point where low rather than high inflation is the primary concern and the US Fed risks "particularly high social costs" if it underestimates the new reality and raises rates too far and too fast.