Morning traders.Market wrap: A flat start to trade is likely as...

Morning traders.

Market wrap: A flat start to trade is likely as gains for key commodities partly offset a late dip on Wall Street.

The September SPI futures contract ended the night session 1 point higher at 4467 after a debt ratings downgrade for Ireland snuffed out a rally in US stocks fuelled by hopes of further central bank stimulus. Gold hit a new record.

The major US share indexes flatlined for most of the night before the release of the minutes from the Federal Reserve's last meeting encouraged hopes for a third stimulus package. But a brief rally flipped over into a third night of losses following news that ratings agency Moody's has cut Ireland's debt to junk status. The Dow turned a 65-point gain into a 59-point or 0.47% loss. The S&P 500 lost 0.44% and the Nasdaq 0.7%.

The minutes from the June 21-22 Federal Open Market Committee meeting revealed a minority of committee members pushing for extra stimulus for the economy. "A few members noted that, depending on how economic conditions evolve, the committee might have to consider providing additional monetary stimulus, especially if economic growth remained too slow to meaningfully reduce the unemployment rate in the medium run," the minutes read.

Commodities pared several days of losses on signs of improved stability in US shares and as news of a widening trade gap in the US took some of the heat out of the reent surge in the US dollar. Bargain-hunters took advantage of recent declines in oil to push it back through US $96 a barrel. Crude for August delivery was recently up $1.48 or 1.6% at $96.63 a barrel.

Gold's six-session rally delivered a new record settlement in the US as Ireland's rating downgrade underlined the corrosive effect of Europe's debt crisis. Gold for August delivery was recently ahead $19.10 or 1.2% at US $1,568.30 an ounce after settling at $1,562.30 an ounce on the New York Mercantile Exchange.

Industrial metals trimmed two days of losses ahead of today's Chinese economic update. In London, copper added 0.8%, aluminium 0.5%, lead 2.1%, nickel 1.4%, tin 2.45% and zinc 1.7%. US copper was recently up 0.4%.

"Although there is a toxic mix of worries about global growth, the debt crisis and stronger dollar, commodities are showing surprising resilience," an analyst at Credit Agricole told Reuters. "Clearly the risk is for the downside, but I'm impressed by the resilience."

The major European markets trimmed severe early losses after an Italian bond auction fared better than feared. Britain's FTSE declined 1.02%, Germany's DAX 0.78% and France's CAC 0.88%.

TRADING THEMES TODAY

SEARCHING FOR SOLID GROUND: Plunging US futures yesterday afternoon encouraged our market to pre-empt a much worse overnight session in the US than actually happened. That's the key reason why our futures are relatively solid this morning despite that late slide on Wall Street. We might see a small rebound this morning, but the big money is likely to be cautious ahead of the monthly update from China (see below). Gold miners are the obvious winners from the overnight action, with the metal reaching a record settlement - in US dollars, at least. The speculative end of the market has withstood two days of savage selling reasonably well - let's hope buyer interest is sustained.

SPOTLIGHT ON CHINA: Our biggest trading partner delivers its monthly economic update at noon AEST today. As usual, the market will be looking for "Goldilocks" numbers - not so hot that the central bank will have to raise interest rates, not so cold that a hard landing is in prospect for the economy. Quarterly GDP is the main interest, with analysts forecasting a modest decline from growth of 9.7% to 9.5%. Also due: retail sales, industrial production and fixed asset investment.

ECONOMIC NEWS: Monthly consumer sentiment figures are due at 10.30 AEST. The Chinese monthly update is due at noon (see above). US Federal Reserve Chairman Ben Bernanke is due to testify tonight before the House Financial Services Committee. Also due tonight in the US: crude oil inventories, import prices and the Federal budget balance.

Good luck to all.