daytrades september 14 pre-market

Morning traders.

Market wrap: A positive start to local trade is likely after a fourth night of gains on Wall Street and rises for key commodities.

The September SPI futures contract this morning closed 14 points stronger at 4646, which suggests our market will improve on yesterday's four-month high at today's open.

The rise follows a solid night on Wall Street, where the Basel III banking rules, China's weekend growth figures and an upgrade to forecast European GDP combined to send the S&P 500 to a one-month high. The benchmark index climbed 1.11% to turn positive for the year. The Dow added 81 points or 0.78% and the Nasdaq gained 1.93%.

The U.S. banking sector rallied on news that the new Basel III rules agreed over the weekend give banks several years to meet fresh capital requirements. An index of U.S. banking shares put on more than 3%.

European markets advanced after the European Commission upgraded its outlook for the region. A report published overnight predicted the euro-region's economy will grow at 1.7% this year, up from a previously projected 0.9%. Britain's FTSE gained 1.16%, Germany's DAX 0.76% and France's CAC 1.11%.

"The path of least resistance is higher," a U.S. fund manager told Bloomberg. "Investor sentiment grew extremely negative as fears that the U.S. was going to slip back into a recession grew. During the past few weeks, we have received better-than-expected economic data from the U.S. and China, and Europe is not as bad as feared."

The U.S. dollar slipped to a one-month low as money continued to move from so-called "safe havens" into risk assets. The dollar index, which tracks the U.S. currency against six major peers, was recently off 1%.

Oil continued to benefit from expectations of improving global growth and disruptions to U.S. supplies caused by the closure of a regional pipeline for repairs. Crude futures were recently ahead 74 cents or 1% at $77.19 a barrel.

Industrial metals moved higher as traders responded to the weekend's strong Chinese industrial production figures. In late trade in London, copper was up 2%, aluminium 1.2%, lead 1.5%, nickel 1.6%, tin 2.1% and zinc 1.8%.

"The Chinese have engineered a gentle slowdown. China might suffer a bit from weaker export demand but there's enough domestic demand to sustain growth at very strong rates," an analyst at Citigroup told Reuters. "With things like copper, there's just not enough being produced anywhere in the world, so I think we're just going to see continual stock declines."

Gold was little changed. The spot price was recently $1.40 softer than Friday's New York close at $1,245.30 an ounce.

TRADING THEMES TODAY

STARS ALIGNING: The gloom that enveloped world markets in late April is lifting as the prospect of a double-dip recession appears to be fading. The Chinese economy is still going at full gallop, Japan is improving, Europe appears to be weathering recent austerity measures without smothering growth and recent reports out of the U.S. have tended to surprise to the upside. There will be wobbles, but the medium-term outlook appears brighter now than it has for some months. Might be time to consider adding a few longer-term holds.

BASE METALS: A bright session in London overnight as traders responded to the weekend's robust Chinese data. Nickel and lead pushed to fresh multi-month highs and other key metals are pushing against recent resistance levels. The April highs could soon come under pressure.

ECONOMIC NEWS: The monthly business confidence update is due at 11.30 am. The Conference Board's index of leading economic indicators for China is due at noon. Monthly retail sales figures are due in the U.S. tonight. Also scheduled: business inventories and economic optimism.

Good luck to all.