daytrades nov 1 pre-market

Morning traders.

Market wrap: Futures traders expect a cautiously positive start to local trade despite a flat end to last week on Wall Street and a mixed session for commodities.

The December SPI futures contract closed 17 points or 0.4% stronger on Saturday morning at 4664 as traders bet that our share market overshot to the downside on Friday.

Wall Street was little changed on Friday as investors held fire ahead of a big week in the U.S. dominated by elections and the expectation of quantitative easing from the Federal Reserve (see below). The Dow edged 5 points or 0.04% higher but the broader S&P 500 finished down 0.04% and the Nasdaq dead flat.

Tepid U.S. economic growth and inflation data raised expectations that the Federal Reserve will on Wednesday announce significant plans to purchase assets to stimulate the economy. GDP improved to an annual rate of 2% last quarter from 1.7% through to June but missed expectations for a rate of 2.1%. Analysts said that rate was still too low to make any serious dent in the stubbornly high unemployment rate.

"The lacklustre economic numbers really suggest the Fed will have to implement more aggressive stimulus measures," the chief investment officer at First Citizens Bancshares in the U.S. told Bloomberg. "As business confidence improves, we'll get a better jobs picture and ultimately investors' psychology will improve. That will be gradual though."

Resource prices were mixed, despite a modest retreat in the U.S. dollar. The dollar index, which measures the U.S. unit against six major currencies, dropped 0.35% to 77.04.

Oil traders trimmed their positions ahead of this week's barrage of news. Crude futures eased 75 cents or 0.9% to $81.45 a barrel.

Precious metals tend to prosper in times of economic uncertainty and rallied on Friday on the expectation that any Federal Reserve monetary easing this week will weigh on the U.S. dollar, making alternative investments more appealing. Gold for December delivery rallied $15.10 or 1.1% to $1.357.60 an ounce. Silver pushed to a new 30-year settlement high, up 69 cents or 2.9% to $24.56.

Industrial metals mostly moderated on risk aversion and rising inventories. In London, copper eased 1.8%, lead 2.4%, nickel 0.4%, tin 2.4% and zinc 2.8%. Aluminium rose 0.3%.

"This market may have priced in a most-bullish scenario for commodities and a most bearish-scenario for the [U.S.] dollar based on expectations for massive amounts of quantitative easing," Michael Gross, futures analyst with Optionsellers.com told Reuters. "The talk now is that it could come in gradual bits, which could disappoint, and if that's the case, the market may have gotten a little bit ahead of itself."

Major European markets ended Friday little changed. Britain's FTSE eased 0.05%, Germany's DAX added 0.09% and France's CAC was off 0.03%.

TRADING THEMES THIS WEEK

CENTRAL BANKS TAKE CENTRE STAGE: Two announcements will dominate this week's Australian trade: the RBA's cash rate announcement tomorrow afternoon and the U.S. Federal Reserve's statement on Wednesday night/Thursday morning (Australian time), which is widely expected to reveal a second round of quantitative easing. The odds on a rise in local interest rates are low after recent data showed inflation well within the RBA's target band and house prices continuing to soften. The main question seems to be how U.S. share indexes will react to the reality of quantitative easing in the U.S. after rising so far on the expectation of it. Will the market sell the fact after buying the rumour?

SUPER TUESDAY: Besides the Reserve Bank's cash rate announcement and the running of the Melbourne Cup, tomorrow also brings mid-term elections in the U.S. that could cost President Obama's Democrats control of Congress. Losing the House or Senate would make it harder for the President to push through legislation and may see a reduction in the government spending that has supported the U.S. economy since the financial crisis.

ECONOMIC NEWS: A busy week for local economic news kicks off this morning with the manufacturing index at 9.30 am and the inflation gauge at 10.30 am but the main local interest today is probably rival Chinese purchasing managers' indexes due at 12 pm and 1.30 pm. Tuesday brings the RBA rate statement and cash rate at 2.30 pm; Wednesday the services index; Thursday retail sales and the trade balance; and Friday the construction index and RBA quarterly monetary policy statement. Besides mid-term elections and the Federal Reserve rate statement (see above), this week's key releases in the U.S. are: personal incomes, consumer spending, core PCE price index, ISM, construction spending (tonight); ISM services, factory orders, motor vehicle sales (Wed); jobless claims, productivity (Thu); and non-farm payrolls, unemployment rate and average hourly earnings (Fri).

Good luck to all.