Daytrading May 21 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

The share market looks set to build on yesterday's tentative reversal at today's open after US stocks closed mixed and key commodities rebounded.

The June SPI 200 futures contract rallied 17 points or 0.3% to 5622 as BHP and Rio Tinto edged higher in overseas trade and most commodity prices stabilised after sharp falls on Tuesday night.

US stocks closed little changed despite a brief jag higher after the minutes from the April Federal Reserve policy meeting appeared to push a rate rise into the second half of the year. The S&P 500 eased two points or 0.09% to a second straight loss after rallying as much as seven points in the moments after the minutes were released late in the session. The Dow fell 27 points or 0.15%. The Nasdaq bucked the downtrend for a second night with a rise of two points or 0.03%.

"I guess the real factor here is the majority of Fed members don't see any reason to raise rates in June," Peter Cardillo, chief market economist at Rockwell Global Capital in the US, told CNBC.

The key 'take-away' from the minutes so far as most commentators were concerned was that only "a few" members of the Federal Open Market Committee thought the economy would be strong enough to weather a rate increase next month. The general view was that the outlook for the economy was cloudier last month following a run of unexpectedly weak data.

“Most Fed policy members, however, thought it unlikely that the data available in June would provide sufficient confirmation that the conditions for raising the target range for the federal funds rate had been satisfied, although they generally did not rule out this possibility,” the minutes said.

The US dollar wobbled after the release of the minutes but quickly regained its advance for the session. The dollar index was lately up 0.28%. The Australian dollar was down almost half a cent, buying 78.81 US cents.

Financials was the best of the sectors despite news that five major international banks will pay US$5.7 billion in fines for their involvement in rigging currency markets. Most of the affected banks saw relief rallies after the penalties were announced. Read more here.

The Dow Jones Transportation Average, viewed by some market analysts as an important indicator of future market direction, slumped 1.96% to a seven-month low as crude oil rebounded. The DJT peaked in December and has since fallen more than 7%. Read more here. West Texas Intermediate crude oil for July delivery settled 99 cents or 1.7% ahead at US$58.98 a barrel as rising tensions in Yemen offset news of a decline in US crude inventories.

BHP and Rio Tinto edged higher overnight after hitting their lowest prices in the US on Tuesday in at least three and a half weeks. BHP gained 0.02% and Rio Tinto 0.88%. Spot iron ore for import to China yesterday extended its losing streak with a decline of 60 cents to US$57.80 a dry ton. Ore delivered to of Qingdao dropped 2.4% or $US1.41 to US$57.12.

The NYSE Arca Gold Bugs index rose 0.13% as the Fed minutes helped gold extend modest gains. Gold for June delivery settled $2 or 0.2% ahead at US$1,208.70 an ounce and was last trading at US$1,209.20.

Nickel pared Tuesday's 4.8% fall, the metal's heaviest in eight months. In London, nickel bounced 0.2% and tin 0.6%. Copper closed flat. Aluminium fell 0.4%, lead 0.4% and zinc 1.26%. US copper for July delivery was recently off 0.3% at US$2.83 a pound.

Most European markets closed higher before the release of the Fed minutes. The Stoxx Europe 600 gained 0.41%, France's CAC 0.31% and Britain's FTSE 0.17%. Germany's DAX eased 0.04%.

TRADING THEMES TODAY

REBOUND BUILDING? Wall Street did not hand us an unequivocally positive overnight lead, but nor did it cruel the ASX's chances of cementing yesterday's partial reversal. The big two miners steadied in overseas trade despite bearish news from Brazil. Iron ore fell again yesterday after Brazilian giant Vale announced an export deal with China. Read more here. Other commodities rallied or at the least reined in the scale of their falls after Tuesday's plunges. The dollar is back below 79 US cents and moving in the direction the RBA wants. CAV demonstrated yesterday that it's naive to take VAR's extraordinary run as some kind of new paradigm for the spec market - exuberance ebbs and flows and you gotta take each trade on its merits.

ECONOMIC NEWS: RBA Assistant Governor Malcolm Edey is due to address a Melbourne conference at 8.50am EST. The April inflation expectations survey is due at 11am, but today's potential market-mover is the 11.45am release of preliminary May Chinese factory data. Tonight's US highlights are weekly benefit claims, existing home sales, flash manufacturing PMI, Philly Fed Manufacturing Index, a leading index and speeches by two Fed officials.  

Good luck to all.