daytrades may 11 pre-market

Morning traders.

Market wrap: Massive overnight gains on European and U.S. equity markets point to a very positive start for local stocks this morning.

With eight minutes left to trade, the June SPI futures contract was ahead 56 points at 4666, suggesting our market should gap up by more than 1% at today's opening bell.

The share market rally that began yesterday in Australia and Asia on news of a US$1 trillion European bailout fund delivered a huge rebound on share markets in Europe and the U.S. The Dow climbed 405 points or 3.9% - its biggest one-day gain since last March. The broader S&P 500 rallied 4.4% and the Nasdaq 4.81%.

The rebound in Europe was even more extreme as banks holding Greek, Spanish and Portuguese debt recorded double-digit gains. France's CAC jumped 9.66%, Britain's FTSE 5.16% and Germany's DAX 5.3%. The Greek ASE Composite powered 9.1% higher, the Portugal PSI 20 10.7% and the Spain IBEX 35 14.1%.

Over the weekend, European finance ministers agreed to fund with the IMF a safety net worth nearly $US1 trillion for struggling euro-zone governments. The package was designed to soothe market fears that Greece, Portugal or Spain would have to restructure debt, a threat that has kneecapped global share markets in the last two weeks.

"At long last, the European Union is putting its money where its mouth is," the chief investment officer at Harris Private Bank in the U.S. told MarketWatch. "At the very least this buys them a lot of time. I don't think Greece is going to have to come back to the bond market anytime soon."

"This truly is an overwhelming force, and should be more than sufficient to stabilise markets in the near term, prevent panic and contain the risk of contagion," added the chief economist at UniCredit Group.

The euro initially rallied strongly on the news but came off its highs as analysts questioned the rescue package. "They injected liquidity to improve confidence but it's also a de facto loosening of monetary policy," the chief market strategist at CMC Markets told MarketWatch. Recently the dollar index, which measures the U.S. currency against six major rivals, was up 0.5%.

Crude oil advanced for the first session in five as investors moved back into "risk assets". Crude futures were recently up $2.16 or 2.9% at $77.27 a barrel.

Industrial metals rebounded modestly from several weeks of heavy losses. In London, copper rallied 2.5%, aluminium 2.8%, lead 2.6%, nickel 1.5%, tin 0.8% and zinc 1.9%.

"The pull-back that we saw was excessive, given the underlying improvement in fundamentals that is going on," an analyst at Barclays Capital told Reuters. "Inventory trends are turning more positive for most metals. We saw the physical markets really pick-up since the price pull-back."

Gold broke its three-day winning run as some of its appeal as a currency hedge dissipated, but remained close to December's all-time high. The spot gold price was recently down $5.40 at $1,202.60 an ounce.

TRADING THEMES TODAY

CHINA: As the European debt crisis fades into the background (until the next time), there's an opportunity today to assess the other cloud on the global horizon - a potential slowdown in China. Today at noon brings the monthly round-up of Chinese economic data - CPI, PPI, retail sales, industrial production and more. Local analysts will look for evidence of solid growth, but not so hot that the central government will take sharp action to further cool the economy. Sudden movements in our indexes at 12.00 EST will indicate how the news has been received.

FEDERAL BUDGET: Tonight's Federal Budget will offer trading opportunities tomorrow but you can bet the smart money will be getting set today, if it's not already in place. Budget details are vague so far but health may be an area worth exploring. Read more here

ECONOMIC NEWS: The monthly Chinese economic round-up at 12.00 is the main event during market hours (see above). The Federal Budget is due at 7.30 pm tonight. A slow start to the week continues in the U.S. tonight with monthly wholesale inventories and consumer confidence.

Good luck to all.