daytrades feb 1 pre-market

Morning traders.

Market wrap: A positive start to trade is likely after US stocks rebounded overnight and oil and most metals continued to rally.

The March SPI futures contract ended the night session 12 points or 0.25% higher at 4738 as US investors looked beyond unrest in Egypt to solid quarterly earnings and the improving domestic economy.

The benchmark S&P 500 clawed back around half of Friday's loss, rallying 0.77% after Exxon Mobil topped earnings expectations, consumer spending increased in December and manufacturing picked up in the mid-west. The Dow rallied 68 points or 0.58% and the Nasdaq 0.49%.

"We had continued strong earnings out of bellwethers like Exxon, and the U.S. economy is improving," the chief executive officer at 300 North Capital LLC in the US told Bloomberg. "Everybody has one eye on what's going on in Egypt, but things are getting back to normal."

Risk appetite picked up after Friday's "flight to safety". Oil and industrial metals rallied but the US dollar and precious metals eased as "safe haven" buying abated.

Crude oil surged to a two-year high as traders continued to fret about the prospect of civil unrest in Egypt spilling into other oil-producing countries. Crude futures were recently up $2.54 or 2.8% at $91.87 a barrel, bringing total gains for the last two sessions to nearly $7.

Copper hit a record high and other base metals improved, boosted by strong manufacturing and consumer spending reports from the US. In London, copper was up 2.6%, aluminium 1.7%, lead 3.1%, nickel 2.5%, tin 2% and zinc 2.6%.

Gold drifted lower as traders awaited fresh developments in Egypt. Gold was recently down $10 or 0.7% at $1,332 an ounce.

However, a precious-metals analyst with MF Global in the US told MarketWatch the fundamentals for precious metals remain strong: "Precious-metals markets are expected to continue Friday's higher direction and advance further this week," said Tom Pawlicki. "Metals will be supported by ongoing tensions in Egypt and the Middle East, from a redevelopment of the safe-haven trade, European sovereign debt, better gold demand before the Chinese New Year, and from technical factors."

European markets mostly closed lower in cautious trade overshadowed by tensions in the Middle East. Britain's FTSE fell 0.31%, Germany's DAX lost 0.36% and France's CAC added 0.08%.

TRADING THEMES TODAY

CAUTIOUS REBOUND: No surprise to see US investors push Egypt to the backburner and return their attention to domestic concerns. This has been a "buy the dip" market for months and the civil unrest in the Arab world would have to spread significantly for this rally to come under serious threat. Having fallen less and partially recovered yesterday, our market may not push too hard today, while the world watches how the Egyptian situation plays out. Today's wildcards are the two Chinese manufacturing reports due at noon and 1.30pm (see below).

OIL: Yesterday's overall market malaise held our oilers back but there will be fewer doubts this morning after last night's two-year-plus high in the price of crude.

CHINESE MANUFACTURING: Twin purchasing managers' indexes due today at noon (the official index) and 1.30 pm (HSBC index) will provide insights into the engine-room of the Chinese economy. These have the potential to move our market if they miss forecasts - or indeed if they show an economy accelerating so fast that the central bank will have to raise interest rates. In other words, the market is looking for "Goldilocks" figures - not too hot, not too cold. The forecast for the official index at 12 pm is 54.1 - a slight tick up from December's 53.9.

ECONOMIC NEWS: It's an unusually busy day for domestic news. The performance of manufacturing index is due at 9.30 am; quarterly house price index at 11.30 am; the RBA releases its rate statement at 2.30 pm (no change expected); and year-on-year commodity prices are released at 4.30 pm. Business confidence figures are also tentatively scheduled for release today, according to Forex Factory. Manufacturing and construction dominate tonight's line-up in the US: manufacturing PMI, manufacturing prices and construction spending.

Good luck to all.