Daytrading March 25 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Shares are pointing mildly lower after Wall Street retreated as inflation rose in the US for the first time in four months.

The June SPI 200 futures contract fell seven points or 0.1% to 5971 as the US dollar rallied in expectation that the up-tick in inflation may push the Federal Reserve closer to raising its key lending rate.

Yield stocks were the biggest drag on Wall Street as the S&P 500 fell 13 points or 0.61%. The Dow lost 105 points or 0.58% and the Nasdaq 16 points or 0.32%. The pullback came as investors mulled a round of upbeat economic reports.

"Whenever you're dealing with interest rate increases from the Federal Reserve, the market goes into a period of good news [is] bad news," Timothy Courtney, chief investment officer at Exencial Wealth Advisors in the US, told CNBC. "Really that's a short-term phenomenon. We're going to be moving out of that. Most of the data today... was pretty good."

The consumer price index lifted 0.2% last month, its first advance since energy prices began to crater last year. The annual core inflation rate was 1.7% over the last 12 months, shy of the 2% target the Fed has for its preferred inflation gauge. Read more here.

Sales of new homes jumped 7.8% last month to a seven-year high, soothing concerns about an uneven housing recovery. House prices improved by a seasonally-adjusted 0.3% in January. A preliminary gauge of manufacturing activity unexpectedly rose this month to its highest level since October.

The strength of the economic data helped put a floor under the US dollar following several days of sharp declines. The dollar index, which measures the greenback against a basket of currencies, was lately up 0.21%. The Australian dollar was down around a tenth of a cent at 78.78 US cents.

Unsurprisingly, house-builders were among the standouts in the US. Utilities, energy stocks and financials recorded the largest falls among the S&P 500's 10 main industry groups. The Dow Jones Transportation Average declined 0.67% as oil inched higher. West Texas Intermediate crude oil for May delivery settled six cents or 0.1% ahead at US$47.51 a barrel ahead of twin weekly US inventory reports.

St Louis Federal Reserve President James Bullard told a European audience the US economy was strong enough to handle increased rates but warned that the market reaction might be "violent" because of a gap between the Fed's intentions and market expectations.

BHP and Rio Tinto declined in US trade for the first time in three sessions following yesterday's weak Chinese manufacturing report. BHP lost 0.65% and Rio 2.64%. Spot iron ore for import to China yesterday bounced $1.40 to US$55.60 a dry tonne.

Copper maintained upward momentum despite soft Chinese factory numbers and a rise in London Metal Exchange inventories. London copper rose 0.4%, lead 0.7% and zinc 0.1%. Aluminium fell 0.4%, nickel 2.7% and tin 0.6%. US copper for May delivery was recently up 0.25% at US$2.80 a pound.

Gold stocks pared recent gains even as a fifth straight advance pushed the precious metal to a three-week closing high. The NYSE Arca Gold Bugs index eased 0.14% in line with the broader market. Gold for April delivery rallied $3.70 or 0.3% to settle at US$1,191.40 an ounce.

European stocks made headway after a report showed German business activity hit a four-year high this month as the falling euro helped exporters. The Stoxx Europe 600 added 0.31% as Germany's DAX put on 0.93%, France's CAC gained 0.66% and Britain's FTSE fell 0.25%.

TRADING THEMES TODAY

CONSOLIDATION CONTINUES: Wall Street is in the midst of a standard retrace after a run higher. While mildly concerning that the S&P 500 failed to set a higher high during the last up-leg, it's not the first time during this long bull rally. The index has plenty of room to move lower before alarm bells ring. The ASX has showed a more independent mind since it became obvious that the rate cycle here is no longer in sync with the US - Australia looking to cut, the US to raise. Therefore there is no guarantee that we will slavishly follow Wall Street lower today. The market demonstrated yesterday that it is also less dependent on Chinese data, shrugging off what was an unexpectedly poor factory report. However, none of that matters much at the speculative end of the market, which remains deliciously frothy. Opportunities abound in these conditions, so let us make hay.

ECONOMIC NEWS: The RBA Financial Stability Review is due at 11.30am EST. Tonight's US data includes durable goods/core durable goods, crude oil inventories and a speech by a member of the Fed.

Good luck to all.