daytrading sep 3 pre-market

Morning traders.

Market wrap:

Australian stocks are primed for a fresh 15-week high after upbeat manufacturing data and the postponement of western intervention in Syria fuelled a substantial relief rally on world markets overnight.

The September SPI 200 futures contract last traded 24 points or 0.4% higher at 5208 at midnight as Europe's benchmark share index delivered its biggest surge in almost two months. US markets were closed for the Labor Day public holiday.

The Stoxx Europe 600 index spiked 1.89% following further evidence that Spain and Italy are pulling out of recession and Chinese factory activity is accelerating. Germany's DAX rallied 1.74%, France's CAC 1.84% and Britain's FTSE 1.45%. Dow futures were this morning trading 109 points or more than 0.7% ahead of tonight's resumption of regular trade.

"The market seems to be taking a good deal of relief from the data pretty much across the board," the director of global emerging markets at Henderson Global Investors in the UK told Bloomberg. "It's pretty encouraging after a disappointing August where you've had a build-up for a potential military action in Syria. Now that seems to have been pushed back a bit."

The final August Markit euro-zone manufacturing PMI improved to 51.4 from 50.3 in July and an initial reading of 51.3. Spain's manufacturing sector recorded its first expansion in more than two years and Italy delivered its best reading since April 2011. The news prompted Danske Bank to declare the euro-zone's long debt crisis was over. Read more here.

Most Asian markets yesterday recorded strong gains after August Chinese data showed the manufacturing sector was once again expanding. Hong Kong's Hang Seng jumped 2.04% and Japan's Nikkei put on 1.38%. The Shanghai Composite lagged at -0.02%.

Shares leveraged to Chinese growth enjoyed healthy gains overnight. In UK trade, Rio Tinto climbed 4.19% and BHP advanced 2.29%. Iron ore also turned higher. Spot ore for import to China rose $1 to US$138.70 per dry metric tonne.

Copper enjoyed a sharp bounce as the Chinese data lifted demand expectations. In London, copper jumped more than 2%, aluminium 0.9%, lead 1.1% and zinc 0.1%. Tin was unchanged and nickel lost 0.4%.

"The data shows the Chinese economy is on a track to regain strength, and that should be reflected in higher demand for metals," a Commerzbank analyst told Reuters.

Oil extended recent falls as the prospect of western intervention in Syria diminished after US President Barack Obama said he will seek Congressional approval before acting. West Texas Intermediate crude for October delivery was lately down 83 cents or 0.8% at US$106.82 a barrel in thin electronic trade. Floor trading resumes tonight.

Gold lost ground for a fourth day as demand for safe havens was dulled by the delay in Syrian action. Gold for December delivery was recently off $4.10 or 0.3% at US$1,392 an ounce in electronic trade.

TRADING THEMES TODAY

BREAKOUT TO CONTINUE: We have a positive platform for the day ahead following further signs that Europe is emerging from its long malaise. The big two miners have room to move higher following juicy gains in UK trade. Rises in most industrial metals should also be supportive. US futures remain bullish ahead of Wall Street's return to trade this evening. China's services PMI at 11am EST is expected to continue the recent run of improving data. On the home front, retail sales and current account figures are due at 11.30am EST, followed by what is expected to be a non-event of a Reserve Bank rate announcement at 2.30pm. With a federal election on Saturday, the odds on a rate change are miniscule.

ECONOMIC NEWS: China's monthly non-manufacturing purchasing managers' index is due at 11am EST. Australian retail sales and current account data are due at 11.30am, followed by an RBA rate decision and policy statement at 2.30pm. Europe releases producer price inflation data tonight. Highlights in the US include two manufacturing PMIs, manufacturing prices, construction spending and economic optimism.

Good luck to all.