daytrades september 13 pre-market

Morning traders. It's good to be back.

Market wrap: Australian stocks are primed to open higher after strong Chinese data over the weekend bolstered Friday's modest gains on Wall Street and a jump in oil.

The September SPI futures contract closed 12 points stronger on Saturday morning at 4577, but that was before the release of strong Chinese industrial output numbers and rising inflation, pointing to healthy domestic demand. Analysts said the robust monthly figures would encourage buying in Australian mining stocks this morning, provided the Chinese central bank does not hike interest rates before the market opens.

Wall Street wrapped up a second week of gains with a rise of around 0.5% on Friday after the wholesale inventories report beat expectations and oil surged on evidence of strong Chinese demand. The S&P 500 added 0.49% for a weekly gain of 0.5%. The Dow rallied 48 points or 0.46% and the Nasdaq gained 0.28%.

Inventories at U.S. wholesalers had their biggest rise in two years in July as improving consumer demand encouraged companies to add to supplies. The 1.3% increase was three times what the market expected.

Also helping sentiment was news that Chinese imports of oil doubled in August to 490,000 tons and broader imports were much stronger than economists expected, suggesting Chinese growth is still running at break-neck speed. Japan added to the picture of improving global demand with June quarter GDP growth of 1.5% on Friday, also higher than expected.

Oil was catapulted higher by a trio of supportive news releases: strong Chinese imports, the temporary closure of a major pipeline and an uptick in global demand expectations. Crude futures rallied $2.20 or 3% to $76.39 a barrel after the International Energy Agency boosted its forecast for global demand by 50,000 barrels a day for this year and a pipeline between Canada and the U.S. was closed for repairs.

Base metals were hit by concerns that China will raise interest rates to curb inflation. Copper recorded its first weekly loss in four weeks after news that China was bringing forward the release of key economic data from today to Saturday.

"This may be an indication that we are looking at a Chinese rate hike," an analyst at Country Hedging in the U.S told Bloomberg. "If that in fact is the case, depending on what they do and how much they raise, it could be hard on copper."

In London, copper fell 0.8%, aluminium 0.4%, lead 1.4%, nickel 1.5%, tin 0.9% and zinc 1.7%.

Gold was little changed, despite a modest move towards "risk assets". The spot price recovered from early jitters to close $2.70 higher than Thursday's New York close at $1,246.70 an ounce.

The major European markets ended Friday's session little changed. Britain's FTSE rose 0.14%, France's CAC added 0.1% and Germany's DAX fell 0.11%.

TRADING THEMES THIS WEEK

CHINA: Saturday's industrial and CPI data showed central government attempts to cool the Chinese economy have had minimal impact. Normally that would be good news for our mining sector. However, the release of the August figures two days early on a weekend has raised suspicions that the central bank will announce an interest rate rise as early as this morning. If that happens - if! - then our mining sector is likely to suffer as traders trim their expectations for Chinese demand for our raw materials. If!

OIL: Crude is once again on the upswing through the trading range that has contained it for the last four-to-five months. Friday's trio of news items were a gift to the bulls: strong Chinese demand, a major pipeline closed for repairs and global demand apparently on the improve. Further gains this week seem likely.

ECONOMIC NEWS: A quiet start to a reasonably busy week for local releases - there's nothing major scheduled today, but keep one eye on the major news outlets for a Chinese interest rate rise. The rest of the week brings: business confidence (Tue); consumer sentiment, housing starts and new vehicle sales (Wed); and inflation expectations and an RBA bulletin (Thu). The U.S. also makes a quiet start to the week, with nothing significant scheduled tonight. The key releases this week are: retail sales (Tue); industrial production (Wed); jobless claims, PPI (Thu); and the CPI and consumer sentiment (Fri).

Good luck to all.