Morning traders. Thanks Trees and after-market regulars.
Market wrap:
Shares look set for a steady start after Wall Street edged lower as a parabolic rally in the greenback pushed the Australian dollar to a six-year low.
The March SPI 200 futures contract edged up five points or 0.1% to 5791, hinting at relief for shareholders a day after the market fell to a one-month low.
US stocks ended a wobbly session with minor losses as gains in financials, transport stocks, energy producers, gold miners and small caps helped offset falls among consumer companies. The S&P 500 traded either side of a tight, 10-point range before closing four points or 0.19% lower for its fifth loss in seven sessions. The Dow eased 28 points or 0.16% and the Nasdaq 10 points or 0.2%.
Wall Street stopped to draw breath a day after nerves about impending rate rises fuelled its most bruising sell-off in five months. The S&P 500 fell 1.6% last week and has extended those losses with two declines in three sessions so far this week as investors took a 'glass half full' view of the strengthening US economy.
"The reason the Fed would raise rates is because growth dynamics are picking up, which would ultimately be a tailwind for markets, though markets will likely challenge that view with volatility," Jeremy Zirin, chief equity strategist of wealth management at UBS in the US, told Reuters.
Traders continued to fret about the impact of a surging US dollar on companies with overseas earnings as the dollar index hit another near-12-year high overnight. The index, which ranks the greenback against a basket of major currencies, was lately up 1.06%. The Australian dollar was lately down almost half a cent at 75.92 US cents after hitting an overnight low of 75.6.
There were pockets of strength in the US, with gold stocks rebounding despite weakness in the metal, the Russell 2000 index of small caps rising 0.61% and the Dow Jones Transportation Average rallying 1.12% as oil touched a two-week low. The NYSE Arca Gold Bugs index bounced 3.28% even as gold for April delivery settled $9.50 or 0.8% lower at US$1,150.60 an ounce, its weakest settlement since November.
BHP and Rio Tinto continued to probe multi-week lows in US trade following a round of disappointing Chinese economic data released after the close of Australian trade yesterday. Investment, retail sales and factory activity fell well short of forecasts in January and February. Read more here. Spot iron ore for import to China resumed its decline following the data, falling 80 cents to US$57.70 a dry tonne. Overnight, BHP lost 1.36% and Rio Tinto 0.89% in US trade.
The Chinese data impacted base metals trade, pushing copper to a two-week low. London copper fell 0.6%, aluminium 0.8%, lead 2%, nickel 2%, tin 2.1% and zinc 1.3%. US copper for March delivery was recently down 0.3% at US$2.63 a pound.
An attempted rally in West Texas Intermediate crude oil was cruelled by news of a ninth straight weekly increase in US stockpiles, but Brent made headway. WTI for delivery in April settled 12 cents or 0.3% lower at US$48.17 a barrel. April Brent rallied $1.15 or 2% to US$57.54 a barrel.
Earlier, European shares surged to a new seven-year high, supported by a weakening euro and optimism over the European Central Bank's quantitative easing program, which began on Monday. The Stoxx Europe 600 rebounded 1.49% as Germany's DAX put on 2.66%, France's CAC 2.38% and Britain's FTSE 0.29%.
TRADING THEMES TODAY
REASONS TO BE CHEERFUL: Wall Street remained in a short-term rates/currency funk overnight, but there were more positives for the bulls than we've seen in any session since Friday's jobs shock ignited this sharp retrace. Small caps, a traditional risk indicator, rallied against the broader market trend. Traders took advantage of a one-month low in companies exposed to the falling oil price. Gold remained under pressure, but traders decided US miners had fallen far enough for select buying. The rally in the greenback has gone parabolic, the period when gains are greatest but reversals can be sudden and vicious. European markets, which had been following Wall Street slavishly lower during this retrace, realised that issues weighing on the US are arguably positives for European companies. You could make a similar case here in Australia. However, there was one big overnight negative, some pretty ghastly Chinese economic data released late yesterday afternoon.
ECONOMIC NEWS: The February inflation expectations report is due at 10.30am EST, but today's main interest is the 11.30am February jobs report. Wall Street finally has some meaty data tonight - retail sales/core retail sales, weekly jobless claims, import prices and business inventories.
