Daytrading November 5 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

A downbeat session on Wall Street points to a flat start here after Federal Reserve Chair Janet Yellen hinted rates will rise next month, boosting the greenback and pressuring commodities.

The December SPI200 futures contract ended the night session little changed, two points or less than 0.1% ahead at 5222 as BHP, Rio Tinto, oil and most metals declined.

The S&P 500 fell seven points or 0.35% from Monday night's three-month high after Yellen told the US House of Representatives Financial Services committee a December rate hike is a "live possibility". The Dow shed 51 points or 0.28% and the Nasdaq three points or 0.05%. The S&P 500 ended Monday's session less than 1% off a record following a five-week rebound from the August lows.

"The market was overbought in the short term and it was looking for a reason to pause and we got the reason today — oil giving back some of its gains and Yellen upping the [likelihood] of a rate hike but not committing to it," Peter Cardillo, chief market economist at Rockwell Global Capital in the US, told CNBC.

The US dollar index was lately up 0.77% and close to a three-month high after the Fed chief presented the case for rates to rise next month for the first time in nine years. Bond yields rose and stocks and commodity prices fell. The Australian dollar was this morning buying 71.54 US cents, down roughly 0.5%.

"What the committee has been expecting is that the economy will continue to grow at a pace that is sufficient to generate further improvements in the labour market and to return inflation to our 2% target over the medium term," Yellen told the committee hearing. "If the incoming information supports that expectation then our statement indicates that December would be a live possibility." Read more here.

Energy stocks were the biggest drag on the index, pulling the US energy ETF down 0.87%. West Texas Intermediate crude oil for December delivery dropped 3.3% or $1.58 to settle at US$46.32 a barrel following news that US inventories increased for a sixth straight week last week.

"Oil inventories have built by a fairly chunky amount despite refinery utilisation increasing, and imports dropping," Matt Smith, director of commodity research at Clipper Data in the US, told CNBC. "Here we are, mired in the US$40 levels, while production ticks higher and inventories stand at over 100 million barrels higher than this time last year."

Australia's largest iron ore miners declined as iron ore slid further below US$50 a ton. BHP gave up 0.65% and Rio Tinto 0.05% in US trade. Spot iron ore for import to China yesterday retreated 40 cents or 0.8% to US$48.30 a dry ton.

US gold stocks tracked the precious metal to a fresh four-week low. The NYSE Arca Gold Bugs index shed 2.63% as gold for December delivery settled $7.90 lower at US$1,106.20 an ounce.

US copper turned lower despite a modest rise in London-traded metal. US copper for December delivery was recently down 0.3% at US$2.32 a pound. London copper edged up 0.2%, aluminium 0.3% and tin 0.2%. Lead lost 0.3%, nickel 1% and zinc 0.8%.

An uneven session in Europe saw the benchmark index improve despite falls in Germany after Volkswagen admitted more problems with its vehicles. The Stoxx Europe 600 advanced 0.51%, France's CAC 0.25% and Britain's FTSE 0.46%. Germany's DAX sagged 0.97% as Volkswagen fell 5.1%.

TRADING THEMES TODAY

MARKING TIME: The benchmark index has swung through a 150-point range over first three days of the week only to finish yesterday where we began on Monday. In other words, we've gone nowhere fast. We may be in for more of the same today after a downbeat session in the US as the odds firmed on a December rate increase. Wall Street has been schizophrenic on the subject of rate rises for the last year and swings every few days from 'Hurray - a rise means the economy is stronger than we thought! Buy stocks!' to 'Boo-hoo - the era of cheap money is ending! Sell stocks!' Last night was a boo-hoo session. The ASX missed yesterday's global rally and therefore has room for making up today. Shanghai surged 4.31%. Commodity prices appear the biggest headwind for the day ahead.

ECONOMIC NEWS: Reserve Bank Governor Glenn Stevens is due to address a Melbourne conference at 9.25am EST. Tonight's US menu includes weekly unemployment claims, Challenger Job Cuts, preliminary quarterly non-farm productivity and unit labour costs, and speeches from two Fed members.

Good luck to all.