daytrades nov 11 pre-market

Morning traders.

Market wrap: Australian stocks are set to open stronger this morning after a rebound on Wall Street and a mixed night for commodity prices.

The December SPI futures contract ended the night session 30 points or 0.6% higher at 4746 as traders speculated that yesterday's China-inspired sell-off on the local share market was overdone.

U.S. share indexes tumbled in early trade as the U.S. dollar climbed to a one-month high and traders responded to tighter lending restrictions in China and Ireland's on-going debt crisis. However, the major indexes turned higher as the dollar's five-session rally eased.

The S&P 500 finished 0.44% higher. The Dow, down nearly 100 points in early trade, closed 9 points or 0.08% ahead. The Nasdaq fared best at +0.62%.

"The market is looking for reasons to sell off," the president of Suffern in the U.S. told Bloomberg. "Whether it's Ireland's debt issues, China's actions to cool inflation or the approaching G-20 meeting, all of them add to investor anxiety after the sizeable run-up."

Asian markets fell yesterday after China ordered its banks to raise their reserve requirements by 0.5% ahead of today's inflation numbers (see below). Meanwhile, Irish bonds fell for a 12th day as concerns grow over the government's ability to service its debt.

The U.S. dollar hits its highest level since late October after a fall in jobless claims and a narrowing in the trade deficit. Claims for jobless benefits fell to a four-month low of 435,000 last week, encouraging hopes that America's deep unemployment problem is easing. The news helped the dollar index hit an intraday high of 78.172 before easing to trade recently at 77.63, up 0.24% for the session.

A surprise fall in U.S. stockpiles helped oil push to a new two-year high. Crude futures were recently up $1.42 or 1.6% at $88.14 a barrel.

Industrial metals were hurt by the rising U.S. dollar, softer Chinese import numbers and news of tighter Chinese lending restrictions. In late trade in London, copper was off 1.3%, aluminium 1%, lead 0.5%, nickel 1.8%, tin 1.4% and zinc 2%.

"Strange things are beginning to creep into view again, causing those in the bull party mode to pause and take stock," RBC said in a note quoted on Reuters. "The USD has continued to strengthen, as concerns over peripheral Europe and speculation of Chinese policy tightening ahead of the G-20 meetings this weekend were confirmed."

Precious metals recovered some of yesterday's heavy falls. Spot gold was recently $11.80 higher than Tuesday's New York close at $1,404.80 an ounce. Spot silver was 37 cents stronger at $27.32 an ounce, following yesterday's 7% plunge, sparked by tighter margin requirements for silver futures.

The major European markets reversed Tuesday's gains. Britain's FTSE fell 1%, Germany's DAX 1% and France's CAC 1.45%.

TRADING THEMES TODAY

CHINA PART 2: In the looking-glass world of trading, positive economic news is not necessarily good for equities, as our market demonstrated yesterday when solid Chinese trade data was followed by news that China's banks have been ordered to tighten lending. The threat of reduced demand for Australian raw materials helped send our market south for a third straight day. 1 pm today brings the regular monthly round-up of Chinese economic news, headed by the CPI, PPI, industrial production and retail sales. The government's pre-emptive move to cool inflation yesterday suggests today's numbers will be strong, but is that positive for the Australian share market or negative because it increases the odds of further tightening? Damned if I know.

ECONOMIC NEWS: A busy day for market-moving news includes inflation expectations at 11 am, the unemployment rate and employment change numbers at 11.30 am and the monthly round-up of Chinese economic data at 1 pm (see above). The U.S. has no news scheduled tonight, due to the Veterans Day bank holiday. Stock exchanges are open as normal.

Good luck to all.