daytrades june 1 pre-market

Morning traders.

Market wrap: Australian stocks face a mixed lead this morning after modest gains in key commodities, a slump in Chinese equities yesterday and public holidays overnight in the U.S. and U.K.

The local June SPI futures contract last traded at midnight, closing 17 points lower at 4421. However, European and Canadian stocks have since closed higher.

The Stoxx Europe 600 rose 0.3% overnight on low volume as most European bourses shrugged off Friday's credit-rating downgrade of Spain. Germany's DAX rallied 0.3% as the weaker euro continued to help its exporters, while France's CAC dropped 0.2%.

"The market has reacted relatively calmly to the downgrade of the sovereign rating of Spain by Fitch, from AAA to AA+ on Friday evening. Moody's still has a AAA for Spain while S&P has a AA," a senior economist with BNP Paribas told investors in a note quoted on MarketWatch.

European investors were cheered by comments from Federal Reserve Bank of Chicago President Charles Evans that debt woes in the euro-zone could force the U.S. to postpone raising interest rates. At a conference in Seoul, Evans told reporters he "wouldn't be surprised" if rates were held at record lows longer than previously planned.

The resource stock-heavy Toronto Stock Exchange gained 0.5% as oil and gold inched higher and local GDP growth beat expectations.

Crude oil futures recovered some of Friday's losses, climbing 47 cents or 0.64% to $74.44 a barrel in thin trade.

"There was no bad news over the weekend," the head of equities for HSBC Global Asset Management's Brazil operation told Bloomberg. "The absence of the American market really dries out the liquidity in other markets."

The recent recovery in the price of gold has slowed but it continues to inch higher. The spot price was recently $1.90 ahead of Friday's New York close at $1,216.20 an ounce.

The U.S. dollar was little changed in thin trade. The dollar index, which tracks the U.S. unit against six major currencies, rose 0.03%.

The London Metals Exchange was closed overnight for the Spring Bank Holiday but copper dropped 1% in Shanghai trade yesterday. Also trading lower was the Shanghai Composite Index, which skidded 2.4% lower after the State Council announced it will reform the property tax regime and Premier Wen Jiabao warned that European debt problems threatened global economic growth.

TRADING THEMES TODAY

UNCERTAINTY: It's hard to get a read on today's likely direction. We can pretty much ignore our futures figure because it pre-dates most of the overseas action. It was good to see Europe and Canada brush off the Spanish debt downgrade that spooked the U.S. on Friday. However, yesterday's fall in Shanghai dragged the Chinese stock market into bear territory for the year. The Shanghai Composite has now declined 21.4% in 2010 and yesterday's plan to cool the property market has implications for our miners. Dow futures are fairly neutral at +16. Another factor to consider is that institutional traders measured on monthly performance are believed to "prop" the market on the last day of the month (ie, yesterday) and then dump next morning (today). On balance, today will most likely be another low-volume session of only modest change.

INTEREST RATES: The Reserve Bank is due to announce the official cash rate at 2.30 pm today. None of 22 economists surveyed by Bloomberg expect the central bank to vary the rate from its current level of 4.5%.

ECONOMIC NEWS: Monthly retail sales and building approvals are both due at 11.30 am. The main event is the Reserve Bank's monthly rate-setting meeting, the result of which is due to be announced at 2.30 pm. The U.S. makes a relatively slow return from the long weekend with the purchasing managers' index, construction spending and manufacturing prices.

Good luck to all.