daytrades oct 6 pre-market

Morning traders.

Market wrap: The share market is primed to open nearly 1.5% stronger this morning after U.S stocks surged to a five-month high overnight.

At 7 am this morning, the December SPI futures contract was ahead 62 points or 1.34% at 4690 after Wall Street's strongest session since late September.

The Dow Jones Industrial Average put on 193 points or 1.8% after U.S. service industry activity expanded more than expected last month and Japan moved to stoke its economy. The S&P 500 rallied 2.09% and the Nasdaq 2.36% as the rise in services activity fuelled hope that economic activity is picking up.

Oil and metals also rallied strongly as the U.S. dollar resumed its decline on speculation that U.S. policy-makers will follow Japan by introducing fresh quantitative easing. The Bank of Japan yesterday cut its policy interest-rate range from 0.1% to between zero and 0.1% and created a new fund to stimulate the economy by buying bonds, corporate debt and other domestic assets.

The Institute of Supply Management's (ISM) non-manufacturing index accelerated from 51.5% in August to 53.2% last month, ahead of expectations. The index flagged a ninth straight month of expansion and pointed to a pick-up in employment.

"We're seeing more optimism creep into the market as we approach earnings season," the chief investment officer at First Citizens Bancshares in the U.S. told Bloomberg. "There's the positive backdrop coming from additional quantitative easing measures. The ISM figure was a positive indicator because of its potential to lift employment data in future quarters."

The U.S. dollar fell to a six-month low against the euro, encouraging a fresh round of buying in gold, silver and other hedges. The dollar index, which rates the greenback against six major currencies, was recently down more than 0.8%.

Gold surged out of its recent trading range and ran to a new record high. The spot price was recently $25.30 or nearly 2% stronger than Monday's New York close at $1,340.30 an ounce. Silver for December delivery spiked 70 cents or 3.2% to $22.74 an ounce, a new 30-year high.

Oil rallied to a five-month high. Crude futures were recently up $1.22 or 1.5% at $82.69 a barrel.

Industrial metals hit multi-month peaks, with copper reaching a 26-month high. In late trade in London, copper was up 1.4%, aluminium 0.7%, lead 1.5%, nickel 2.4%, tin 2.8% and zinc 3.7%.

"Everything is just exploding on the upside. The new event really overnight was the BOJ saying it was going to ...ease
monetary conditions. We've obviously also had the Fed say it's going to embark on new easing measures - who's next?" an analyst at Credit Agricole told Reuters.

European markets broke a six-session losing run as a new wave of optimism swept global markets. Britain's FTSE rallied 1.44%, Germany's DAX 1.33% and France's CAC 2.25%.

TRADING THEMES TODAY

BOOM: What a night. Equities, oil, metals all up - can't ask for a much stronger lead. This rally is long in the tooth but the prospect of further quantitative easing around the globe may well keep it going for some time yet as investors rotate out of bonds and the U.S. dollar into equities in search of better returns. Much will depend on the strength of the upcoming U.S. Q3 earnings season, but until then, the party in equities is still raging.

METALS: A strong session for local metals miners lies ahead after one breakout after another in the metals complex last night. BHP, Rio Tinto and Alumina all rallied in overseas trade. A weakening U.S. dollar combined with the prospect of further economic stimulus means the outlook for metals prices is very good, although the impact of the rising Australian dollar should also be considered.

ECONOMIC NEWS: There's nothing scheduled locally today. Jobs are at the top of the agenda in the U.S. tonight, with non-farm employment change dominating a schedule that also includes crude oil inventories, year-on-year job cuts and a speech by Treasury Secretary Tim Geithner.

Good luck to all.