daytrades jan 7 pre-market

Morning traders.

Market wrap: Lower commodity prices and a tepid session on Wall Street following disappointing U.S. Christmas retail sales point to a soft start for Australian shares.

The March SPI futures contract ended the night session 5 points or 0.11% weaker at 4707 after falls in oil, most metals and Australian miners listed overseas.

U.S. shares mostly retreated after overnight reports showed the Christmas shopping season was not as strong as analysts expected. The S&P 500 eased 0.21% and the Dow gave up 26 points or 0.22%. The Nasdaq, less exposed to retailers and a weakening telecom sector, rallied 0.29%.

"The retail sales numbers today were surprisingly weak based on the data we'd been seeing and reading reports on about holiday shopping," a manager at Greenwood Capital Associates in the U.S. told Bloomberg. "The [late-December] storm had something to do with that, but not all of it, and that's weighing on the market today."

The weekly jobless claims report met analyst expectations, bolstering hopes that tonight's monthly reports will show a decline in the unemployment rate from 9.8% to 9.7%. The news helped sustain a second night of strong gains for the U.S. dollar, pressuring commodity markets. The U.S. dollar index was recently up 0.7% at 80.84, near its highest level since late November. The Australian dollar dropped back below parity, trading recently at 99.5 U.S. cents.

Australian miners fell back in U.S. trade. BHP lost 1.7%, Rio Tinto 1.9% and Alumina 2.5%.

Oil continued its week-long decline. Crude futures were recently down $1.98 or 2.2% at $88.32 a barrel.

Gold survived another a test of the mid-December low, briefly dipping under $1,370 an ounce and trading recently at $1,372 an ounce, down $1.50 or 0.1%. March silver was recently down 7 cents or 0.3% at $29.13 an ounce.

Industrial metals were mixed in London but copper fell for a second day in three on signs of growing inventory. Copper stockpiles in London increased for 16 straight days late last year and are now at their highest level since late September.

Copper fell 8 cents or 1.9% in U.S. trade to $4.32 a pound. Earlier in London, copper dropped 0.8% and nickel 0.4%. Aluminium rallied 2.1% and tin 0.3%. Lead and zinc were flat.

The major European markets pared gains late in the session as Wall Street declined. Britain's FTSE fell 0.4%, Germany's DAX added 0.6% and France's CAC closed unchanged.

TRADING THEMES TODAY

ENDING THE WEEK ON A LOW: A soft start to the new year looks like ending on a low for the week with little in the overnight action to encourage an upswing today. Wall Street down, UK down, oil down, copper down, index futures down, miners down on overseas trade, precious metals down. Plus, it's Friday. New week please.

CHARGING U.S. DOLLAR: The greenback ran to its highest level in more than a month overnight as last night's economic data supported signs of a turnaround in the U.S. jobs market. The rise sapped buying demand for dollar-denominated commodities and sparked selling in our big miners in overseas trade. It also sent the Aussie back below parity. Precious metals, used as a hedge against a falling U.S. dollar, are particularly vulnerable if this run continues, but gold has so far respected the mid-December low and could be good buying at this level if - if! - tonight's U.S. jobs report disappoints and the greenback turns south.

ECONOMIC NEWS: There is nothing scheduled here today, but several potential market-moving events tonight in the U.S., including: testimony by Federal Reserve chairman Bernanke on the economic outlook for the U.S. before the Senate Budget Committee; the unemployment rate; and non-farm employment change report. Also due: consumer credit and average hourly earnings.

Good luck to all.