Daytrading October 13 afternoon

Thanks Oscar and morning crew.


Half-time round-up:

Shares declined for a second day as crude oil slipped below US$50 a barrel and analysts downgraded mining heavyweights BHP and Rio Tinto.  

At 1pm EST the ASX 200 was 40 points or 0.7% lower at 5434 as a surging US dollar pressured commodities and mining stocks. The US dollar index hit a seven-month high overnight after the minutes from the last US Federal Reserve meeting showed members leaning towards a rate increase as soon as December.

West Texas Intermediate crude oil futures this morning eased 39 cents or 0.78% to US$49.79 a barrel. The energy sector fell 1.4%, metals & mining 1% and materials 0.8%. Also weak were IT -2.3% and health -1.3%. The gold sector rallied 2.1% and consumer staples 0.3%.

BHP and Rio Tinto were major drags on the index after Citi downgraded both to 'Sell' on the expectation that bulk commodities will decline under the pressure of a rising greenback. (A strengthening dollar makes commodities more expensive for holders of other currencies - China, Japan, etc - and makes commodities less appealing as an alternative investment to the security of the greenback.)

“The US has a rate-tightening bias and the rest of the world generally has a rate-easing bias,” Philippe Bonnefoy, founder of Switzerland-based hedge fund Eleuthera Capital, told Bloomberg. “The [US] dollar is responding to that. The dollar is very comfortably bid and that bid will continue into year-end.”

Asian markets were mixed. China's Shanghai Composite edged up 0.13%, Hong Kong's Hang Seng dropped 0.43%. Japan's Nikkei rose 0.51%. Dow futures were recently down 42 points or 0.23%.

Gold futures firmed $3.20 or 0.26% to US$1,257 an ounce. The dollar was buying 75.33 US cents.


Trading: not a sausage. Missed an entry to ALU by two pips - that's my big regret. Was hoping for another swing lower in LBT to get set for the reversal.