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

Morning traders.

Market wrap: A flat start to local trade is likely after a directionless session for resources and U.S. equities as the U.S. dollar rallied.

The December SPI futures contract this morning closed 4 points or 0.1% weaker at 4685 after a mixed session for commodities and overseas equities.

A rise in consumer confidence helped the Dow recover from a 100-point fall early in the session to close 5 points or 0.05% higher. The S&P 500 closed unchanged as some company earnings reports missed expectations. The Nasdaq rallied 0.26% as tech stocks outperformed during a tepid session.

"We've had some modestly disappointing earnings reports from a couple of bellwether companies such as U.S. Steel," a spokesman for Loomis Sayles in the U.S. told Bloomberg. "The earnings environment is a little less buoyant than it has been and people are using the opportunity to consolidate their positions after a strong run."

The session's main economic reports were mixed. House prices eased in August, but consumer confidence beat expectations and manufacturing activity in the "Central Atlantic" region picked up this month.

The rise in the consumer confidence index from 48.6 in September to 50.2 this month fuelled a bounce in the U.S. dollar. The dollar index, which measures the greenback against six major currencies, was recently up 0.74% at 77.67.

Commodity prices tend to have an inverse relationship with the U.S. dollar because gains in the latter make commodities more expensive for overseas buyers. However, commentators were struck by the resilience of commodity prices overnight, with oil and metals mixed but little changed despite the headwind.

"There's general demand for commodities, the story is more than the dollar," a technical analyst at Auerbach & Grayson in the U.S. told MarketWatch.

Oil benefitted from mostly upbeat U.S. economic data that raising hopes for the prospects for demand. Crude futures were recently up 9 cents or 0.1% at $82.61 a barrel.

Gold shook off early weakness to trade little changed, while silver continued to rebound from this month's low. Spot gold was recently 50 cents weaker than Monday's New York close at $1,339.80 an ounce. December silver rallied 29 cents or 1.2% to $23.83 an ounce. Platinum and palladium also gained.

Industrial metals were mixed, with U.S. copper closing stronger, London copper weakening. U.S. copper added 0.3% to close near a 27-month high. In late trade in London, copper was off 0.2%, nickel 1% and tin 0.9%. Zinc was up 1.9%, aluminium 0.3% and lead 0.6%,

The major European markets closed lower after some disappointing earnings reports. Britain's FTSE dropped 0.78%, Germany's DAX 0.38% and France's CAC 0.45%.

TRADING THEMES TODAY

LIKE LAST NIGHT NEVER HAPPENED: There was quite a bit of movement on Wall Street and commodity markets overnight but you wouldn't know it from the closing prices. Pretty much everything finished more or less where it started. Ho hum. Perhaps the main point of interest was the resilience of resource prices to the bounce in the U.S. dollar. The first hint of a break in the inverse dollar/commodities relationship? Worth watching, since that dynamic has been at the heart of trade direction these last few months. In the meantime, our market is short of strong leads this morning - at least until 11.30 am (see below).

LOCKING IN A RATE RISE?: The argument for or against raising the cash rate on Melbourne Cup Day may be settled at 11.30 am today when the quarterly consumer price index is revealed. Consumer prices are largely responsible for inflation and the Reserve Bank has repeatedly said keeping inflation within its target band is its main concern. The CPI is forecast to rise from 0.6% to 0.8%, which economists think would be enough to guarantee a rate rise next month. This could be a genuine market-moving event. Bank shares will be among the first to react.

ECONOMIC NEWS: The quarterly consumer price index is released at 11.30 am (see above). The key releases tonight in the U.S. include durable goods orders, new home sales and crude oil inventories.

Good luck to all.