Daytrading August 17 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Australian stocks look set for a cautiously positive open following gains in the US amid broadly positive economic data and news that European leaders signed off on new loans for Greece.

The September SPI200 futures contract edged up nine points or 0.2% to 5300 as Wall Street ended a volatile week on an upswing.

The S&P 500 rallied eight points or 0.39% to claim a weekly advance of 0.7%. By contrast, the ASX/S&P 200 fell 2.2% last week and closed at a seven-month low. The Dow points rose 69 points or 0.4% on Friday for a weekly tally of 0.6%. The Nasdaq added 15 points or 0.29% on the day and 0.1% during the week.

“Economic data has been a bit better than expected and people are not worrying as much about China,” Paul Zemsky, head of multi-asset strategies at Voya Investment Management in the US, told Bloomberg. “Those are helping, and the fact that the yuan has stabilised and hasn’t come crashing down has given a bid under the market.”

Nine out of ten S&P industry sectors advanced as industrial output added to the case for a rate increase next month, offsetting mixed inflation figures and a soft reading on consumer confidence. Industrial production increased 0.6% last month, ahead of expectations, in a sign that the manufacturing sector is gathering steam after a slowdown. Data for February, May and June was revised upwards by 0.1% each month.

Producer prices rose more than expected last month but at a slower pace than in June. The producer price index edged up 0.2%, versus the economists' consensus figure of 0.1% and a 0.4% rise the previous month. The core PPI also rose 0.2%.

"This is definitely good news," Art Hogan, chief market strategist at Wunderlich Securities in the US, told CNBC. "We're in desperate need of a modest increase in inflation."

Consumer confidence deteriorated for a second month amid speculation that lending rates are about to increase for the first time in nine years. The University of Michigan sentiment index edged down to 92.9 from 93.1 in July.

The market hit its high near the close after European leaders signed off on a third bailout deal for Greece. Read more here. The Stoxx Europe 600 pared its loss for the session to 0.18%, Germany's DAX and Britain's FTSE both gave up 0.27% and France's CAC 0.61%.

Utilities and financials were the pick of the US sectors. Energy was the only sector to lose ground, as US crude oil touched a new six-and-a-half-year low. The US energy ETF eased 0.22%. West Texas Intermediate crude oil for September delivery fell as low as US$41.35 before recovering to settle 27 cents or 0.6% ahead at US$42.50 a barrel.

Australian iron ore heavyweights BHP and Rio Tinto made headway as ore continued to resist the downward pressure on commodities such as oil and base metals during last week's Chinese currency crisis. BHP put on 0.42% and Rio Tinto 0.39% in US trade. Spot iron ore for import to China ended flat on Friday at US$56.20 a dry ton.

Copper and zinc missed out on  general rebound in base metals on Friday. London copper dropped 0.3% and zinc closed flat. Aluminium bounced 0.4%, lead 0.5%, nickel 1.4% and tin 3%. US copper for September delivery was recently up % at US$2.42 a pound.

Gold stocks continued to ease from one-month highs as the US dollar resumed its uptrend following last week's Chinese devaluation setback. The NYSE Arca Gold Bugs index declined 1.11% as gold for December delivery settled $2.90 or 0.3% lower at US$1,112.70 an ounce.

The Australian dollar was this morning buying 73.81 US cents.

TRADING THEMES TODAY

VOLATILITY DECLINING?: There were positive signs towards the end of last week that world markets were settling down after China's surprise intervention in currency markets. Wall Street actually managed to end the week with a gain, which compares very favourably to falls of 2.2% here, 4.4% in Germany and 2.7% across Europe as a whole. That suggests room for at least a partial realignment this week - either Australia and Europe rise to close the performance gap or Wall Street comes back to us. Unfortunately, the trajectory of the downtrend on the XJO suggests the index may want to visit 5300 before bouncing. Oil, gold and copper eased on Friday but the falls were mild compared to the ructions earlier in the week. Iron ore has been notably resilient.

ECONOMIC NEWS: No significant domestic news scheduled today. Tonight's US highlights are the Empire State Manufacturing Index, housing market index and long-term purchases.

Good luck to all.