daytrades april 11 pre-market

Morning traders.

Market wrap: Stocks may open modestly lower this morning as traders weigh surging commodity prices and Australia's largest ever take-over bid against falls in US equity indexes on Friday.

The June SPI futures contract closed 11 points or 0.22% weaker at 4954 on Saturday morning after US stocks retreated, oil punched through US $113 a barrel and gold and tin hit record levels.

The Dow dropped around 80 points before a late rally pared the loss to 29 points or 0.24%. The S&P 500 dropped 0.4% and the Nasdaq 0.56%.

The US dollar fell to its lowest level since December 2009 as a federal budget stand-off in Washington - subsequently resolved - weighed on sentiment. The sliding greenback helped push commodity indexes to two-and-a-half year highs and catapulted the Australian dollar to new levels as investors sought hedges. The Aussie was this morning buying US $1.0567.

The Thomson Reuters/Jefferies CRB Index of commodities rose for the seventh straight session, fuelling inflationary fears. Oil, tin, nickel, gold and silver were prominent among the gains.

Crude oil reached a 30-month high, boosting energy shares in the US and weighing on transport stocks and airlines. Light crude for May delivery rallied $2.49 or 2.3% to $US113.05 a barrel.

"As oil rises, the synchronised trade is to de-risk," a money manager at Stifel Nicolaus in the US told Bloomberg. "Higher commodities prices raise concern about future inflation and consumption. One should keep a careful eye on companies' forecasts and on input costs in particular."

Silver closed above US $40 an ounce and gold pushed further into record territory. Silver for May delivery improved for a fifth session, rising $1.06 or 2.7% to $40.61 an ounce, its highest level since 1980. June gold put on $14.80 or 1% at $1,474.10 an ounce.

The recovery in industrial metals continued with a new record for tin, a three-year high for lead and a two-and-a-half year high for aluminium. In London, copper added 2.3%, aluminium 1.4%, lead 2.2%, nickel 2.6%, tin 1.3% and zinc 2.9%.

"It's an across-the-board surge in all the commodities. Gold, oil... they're all up. People are dumping the [US] dollar and buying commodities," a senior commodity analyst at MF Global told Reuters.

Gains in mining stocks helped the major European markets advance. Britain's FTSE rallied 0.81%, Germany's DAX 0.53% and France's CAC 0.83%.

TRADING THEMES THIS WEEK

BHP TO BID FOR WOODSIDE?: Britain's Sunday Times last night reported that BHP is ready to launch Australia's biggest take-over deal: a $46 billion bid for Woodside Petroleum. The report said BHP was in talks with Shell to buy its 24% share in the oil company and then launch a full take-over bid for WPL. Speculation about a potential deal has been rife for weeks but confirmation that talks are underway could light a fire under our resource sector as traders bet on other potential targets. Given BHP's weight on share indexes, the reaction to any deal will have a large impact on our market's direction this week. Read more here.

US EARNINGS SEASON GETS UNDERWAY: The Q1 earnings season in the US starts tonight with Alcoa and continues for the next three weeks. US shares indexes were flat last week as traders waited for evidence of corporate health. In particular, traders want to see how the US recovery is coping with rising inflation and higher input costs through commodity price increases. Other bellwether companies reporting this week include: JP Morgan (Wed), Google (Thu) and Bank of America (Fri).

SURGING COMMODITIES: Friday was a boom night for commodities as US traders rotated money away out of the sliding greenback into alternative investments. Take your pick: oil, gold, silver, lead, tin, copper, aluminium all look promising this week.

ECONOMIC NEWS: A busy week of scheduled news lies ahead here and in China and the US, although all are likely to be overshadowed by the reaction to US corporate earnings. The Australian calendar includes: business confidence (Tue); consumer sentiment (Wed); and inflation expectations and new car sales (Thu). China delivers its monthly economic update on Friday, including inflation, retail sales and industrial production. Highlights in the US this week include: trade deficit, import price index (Tue); retail sales, inventories (Wed); weekly jobless claims, producer price index, core PPI (Thu); and consumer price index, core CPI, Empire state index, industrial production and consumer sentiment (Fri).

Good luck to all.