GOOD MORNING ALL - HERE'S OVERNIGHT MARKET UPDATE> US equities...

GOOD MORNING ALL - HERE'S OVERNIGHT MARKET UPDATE

> US equities were higher overnight as gains in technology shares and an increase in US business inventories offset an unexpected drop in retail sales. At the time of writing, the DJIA was up 0.3% to 10712, the S&P 500 gained 0.2% to 1149 and the Nasdaq was 0.5% higher at 2319.

> The Australian SPI 200 Mar 10 futures contract was up 6 points or 0.1% to 4885.

> US bond yields were lower overnight as the US retail sales declined, increasing speculation the Fed would keep interest rates near zero. Yields were also lower as the $13bn auction of 30-year bonds met solid demand. The 2-year yield fell 4bps to 0.919%, whilst the 10-year yield declined 6bps to 3.729%.

> Australian bond futures moved in line with US Treasuries yet underperforming at the long end of the curve. The implied yield on 3-year bond futures was down 3bps to 5.180% (price up 3bps to 94.820) and the implied yield on the 10-year bond futures declined 3bps to 5.650% (price up 3bps to 94.350).

> European equities rose after ECB President Jean-Claude Trichet stated that the European economy would expand at a moderate pace, signaling policy makers would not rush to withdraw stimulus measures. The DJ Euro Stoxx 50 rose 0.4% to 2990, the German DAX gained 0.4% to 5989 and the FTSE was 0.5% higher at 5498.

> The USD weakened against major crosses as soft economic data increased speculation that interest rates would remain at current levels for an extended period of time. EUR/USD weakened to an overnight low of 1.4445 but later pared losses to open higher at 1.4500. GBP/USD opens strong around 1.6330 after gaining steadily overnight. USD/JPY opens weaker at 90.99 after a choppy session.

> It was a positive night for the AUD as it gained against major its counterparts. AUD/USD opens strong at 0.9309, gaining steadily overnight. AUR/EUR opens strongly above 0.6400, gaining 0.5%. AUD/JPY initially rallied above 85.60, later paring back gains to open lower at 84.70. AUD/NZD opens unchanged at 1.2540 after a quiet trading session.

> Crude oil was trading lower overnight after US retail sales unexpectedly weakened and jobless claims rose, indicating that the economic recovery may be slower than anticipated and dampen the demand for fuel. WTI futures contract for January fell 0.3% to US$79.44 a barrel.

> Spot gold strengthened after the US dollar declined boosting the appeal of the precious metal as an alternative asset. Spot gold gained 0.5% to US$1,143.93 an ounce.

> LME copper increased 0.1% to US$7490 as inventories rose 0.4% and the lower price of the metal in the London Metal Exchange compared with Shanghai encouraged Chinese traders to buy the commodity. Other base metal futures traded positive with zinc, aluminium and lead increasing 0.6%, 1.8%, 1.1% respectively. Nickel closed unchanged.

> US wheat and corn fell 2.0% and 1.2% after a US government report said export demand for the commodities had declined. Soybeans declined 0.9% on speculation that favorable weather would boost production in South America, reducing demand for supplies from the US. Sugar lost 1.0% while palm oil futures were 0.8% higher.

GOOD TO ALL TRADERS!