daytrade diaries... february 11

Morning traders.

Market wrap: The Australian stock market is likely to open higher this morning despite a soft night on Wall Street and mixed commodity markets.

The local March SPI futures contract is pointing to an open 14 points above yesterday's close. The contract closed at 4495 after mild losses for U.S. share indexes as traders weighed the prospect of higher borrowing costs against hopes of a Greek bailout package being announced tonight.

The Dow closed 20 points or 0.2% lower at 10,038. The S&P 500 was down 0.22% and the Nasdaq 0.14%. Shares tumbled in early trade after Federal Reserve Chairman outlined plans to tighten lending later this year, but recovered after a French newspaper said a rescue package for debt-laden Greece could be unveiled as early as tonight.

Bernanke said the Federal Reserve might hike the discount lending rate before long, but leave the federal funds rate where it is.

"It's a de facto tightening on the banks - an attempt to make sure the excess liquidity that has gotten into banks doesn't somehow get transmitted to the animal spirits into the real economy," a market strategist told MarketWatch. "If you're a bank investor, this would be seen as a negative."

Meanwhile, French newspaper Le Monde reported that France and Germany will present a plan at a European Union summit tonight to prevent Greece from going bankrupt, easing fears that a rescue package would take time to develop.

U.S. financial shares shook off early losses after the Bernanke statement. The S&P Bank Index closed 1.25% higher. Resource sectors were mildly lower as the U.S. dollar index rallied 0.23% on the prospect of credit tightening and the delay in a rescue package for Greece.

Crude oil futures climbed 1% to $74.50 a barrel after the U.S. Energy Information Administration said it expects oil prices to rise over the next two years. The spot gold price initially gave back most of yesterday's gains but pared losses in late trade to recently sit at $1,070.90 an ounce, down $6.70 on yesterday's New York close.

Industrial metals were mixed and little changed ahead of the start of the Chinese new year holiday. In London, copper slipped 0.5% and aluminium 1.1%, while lead rose 0.9%, nickel 1.2%, tin 1.6% and zinc 0.5%.

European markets edged higher for a second session. Britain's FTSE rose 0.39%, Germany's DAX 0.69% and France's CAC 0.63%.

TRADING THEMES TODAY

CHINA: Traders will watch today's 1pm release of Chinese CPI and PPI numbers for further clues to the Asian giant's economic momentum. There were reports yesterday of a 25% fall in iron ore imports last month, but economists said the bald numbers were tough to interpret because of various local factors. Read more here: http://www.businessspectator.com.au/bs.nsf/Article/UPDATE-2-China-import-export-strength-clouded-by-c-2J9MQ?OpenDocument

ECONOMIC NEWS: Plenty happening today, with consumer inflation expectations data at 11 am and then local unemployment numbers at 11.30 am. Add the Chinese numbers at 1 pm and we could be in for an interesting session. Unemployment numbers are also scheduled in the U.S. tonight - various other releases have been postponed due to snowstorms.

Good luck to all.