daytrading aug 6 pre-market

Morning traders. Thanks again for the support regarding my late father-in-law. It does help.

Market wrap:

Australian stocks should erase Friday's losses after a positive jobs report and a more optimistic outlook towards Europe helped US stocks end the week with a surge.

The September SPI 200 futures rallied 58 points or 1.4% on Saturday morning to 4243, which suggests the market will likely open near a 12-week high this morning.

The S&P 500 jumped 1.9% on Friday to tally a fourth straight winning week. The Dow put on 217 points or 1.69% and the Nasdaq added 2%.

"The US economy is continuing to plod along, not going into a recession," the chief investment strategist at Northern Trust in the US told Bloomberg. "While Mario Draghi did not give us the magic bullet, they're clearly working towards further intervention to help support the European Monetary Union."

The rally came as the market took a more considered view of Thursday's comments by European Central Bank President Mario Draghi, who implied the central bank will buy Spanish and Italian government debt but not before September. Concerns about German opposition to such a move eased on Friday when members of Chancellor Angela Merkel's coalition said they would not block the proposal. Spain's Prime Minister Mariano Rajoy hinted on Friday that his country may make a formal request for a bailout.

European markets reversed Thursday's heavy losses to notch up a ninth straight week of gains for a regional index. Germany's DAX charged 3.93%, France's CAC 4.38%, Spain's IBEX 35 6% and Italy's FTSE MIB 6.34%.

Investor sentiment was also boosted by US economic news, which delivered the strongest monthly increase in jobs in five months and an improvement in services activity. Non-farm employment grew by 163,000 workers during July, well ahead of expectations, even as the unemployment rate ticked up to 8.3%. A gauge of services activity improved to 52.6% from 52.1% in June.

Oil rocketed nearly 5% on optimism about the resilience of the US economy and as the US dollar plunged against the euro, easing the cost of dollar-denominated commodities for overseas investors. Crude for September delivery advanced $4.27 or 4.9% to US$91.40 a barrel.

Copper had its session in three weeks in the US as a "risk on" session saw money flow out of havens and into assets more exposed to the global economy. In London, copper rallied 1.5%, aluminium 0.8%, lead 2.2%, nickel 2.3%, tin 2.7% and zinc 1.5%. US copper for September delivery tacked on seven cents or 2.3% at US$3.37 a pound.

Gold broke a run of three losing sessions, advancing with the risk assets. Gold for December delivery put on $16.30 or 1% at US$1,607 an ounce.

TRADING THEMES THIS WEEK

RISK ON: What a difference a day makes. After tossing their toys out of the cot on Thursday, investors in Europe and the US decided they may have over-reacted to the usual ponderous ECB machinations, and perhaps Mario Draghi may come through in the end. The near-5% surge in oil on Friday suggests a significant shift in risk appetite that should get the ASX's week off to a winning start. There has been a genuine change in the feel of the Australian market over the last two weeks. Runs on the likes of SIR and NWE imply there is money coming back into the speculative end of the market. The XSO is still locked firmly in a downtrend but a reversal there may not be far off.

US VACUUM LEAVES SPOTLIGHT ON EUROPE: A light week for US economic news and the winding down of the latest quarterly earnings season will leave world markets looking for fresh leads this week. The week should start on an upbeat note following Friday's big reversals, but after that Europe and China may take centre stage. European economic news is unlikely to be supportive, but investors will hang on any new that suggests a breakthrough in the grinding sovereign debt crisis. China starts to release monthly economic data from Thursday, including inflation, industrial production and trade balance figures.

RATES AND EMPLOYMENT: Highlights on the domestic news calendar this week include a Reserve Bank policy meeting tomorrow that is highly unlikely to produce any change in the overnight cash rate, and the monthly employment report on Thursday. Economists polled by Bloomberg predict the RBA will leave the cash rate at 3.5% tomorrow afternoon. Unemployment is expected to tick up a tenth of a percentage point to 5.3% on Thursday. More domestic news below.

ECONOMIC NEWS: This week's domestic calendar lists: inflation gauge at 10.30am EST, job ads at 11.30 am (both today); construction index, RBA rate statement and cash rate (tomorrow); home loans (Wed); employment change, unemployment rate (Thu); and RBA Monetary Policy Statement (Fri). A light week in the US includes: productivity, unit labour costs (Wed); weekly jobless claims, trade deficit (Thu); and import price index (Fri).

Good luck to all.