Daytrading September 17 pre-market

Morning traders. Thanks Trees and after-market regulars.

Market wrap:

Australian shares are poised for their strongest open in a week after a commodities rally helped Wall Street advance for a second night ahead of tonight's Federal Reserve rates decision.

The September SPI200 futures contract, which expires today, rose 35 points or 0.7% to 5152 as a strong session in the energy sector helped steer US stocks to a four-week high.

The S&P 500 put on 17 points or 0.87% as the market continued to recover from the August 'yuan-devaluation' correction. The Dow gained 140 points or 0.84% and the Nasdaq 29 points or 0.59%.

"It's all about waiting for [the Fed decision tonight]," Jeff Carbone, managing partner of Cornerstone Financial Partners in the US, told CNBC. "Right now you're seeing the market being positive. The consensus is the Fed is not going to do anything."

The US dollar index, which would be expected to rise if a rate hike was likely tonight, was lately down 0.25%. The index slumped to a seven-month low during the August market rout and - like US equities - has struggled to regain  levels seen before China devalued its currency.

Overnight data showed consumer prices declined last month, a signal that inflation remains subdued and offers no reason to raise interest rates. The Consumer Price Index declined a seasonally-adjusted 0.1%, its first drop since January, as energy prices fell 2%. The annual gain in core prices was steady from July at 1.8%. Read more here.

"The Fed can well afford to wait given inflation remains contained," John Lonski, chief economist at Moody's, told CNBC.

The mood in Europe and the US was helped by a sharp rebound in Chinese equities after two days of heavy selling. The Shanghai Composite bounced 4.89% yesterday, the index's strong rise in three weeks, amid reports that the Chinese securities regulator may take a less draconian line on illegal margin trading accounts. Read more here.

Resource stocks and commodity prices benefitted from the falling greenback. Oil surged to its highest level this month after US inventories declined for the first time in three weeks. West Texas Intermediate crude oil for October delivery settled $2.56 or 5.7% ahead at US$47.15 a barrel. The US energy SPDR ETF jumped 2.83%.
  
Gold stocks had their best night in weeks as the precious metal logged its strongest advance in almost a month. The NYSE Arca Gold Bugs index rebounded 6.47%. Gold for December delivery settled $16.40 or 1.5% higher at US$1,119 an ounce. Analysts attributed the move to short covering following the overnight inflation data.

BHP rallied 3.86% and Rio Tinto 0.84% in US trade even as iron ore declined for a third session. Spot iron ore for import to China yesterday eased 40 cents to US$56 a dry ton.

Base metals benefitted from the improved mood in China and sliding greenback. London copper rose 0.6%, aluminium 0.9%, lead 2.8%, nickel 0.5%, tin 0.7% and zinc 0.8%. US copper for December delivery was recently up 1.1% at US$2.45 a pound.

Europe's benchmark index recorded its biggest rise in two weeks after US brewer Anheuser-Busch pitched a take-over offer at British giant SABMiller, fuelling strong gains for other European brewers, including Carlsberg, Heineken and InBev. The Stoxx Europe 600 improved 1.53%, Germany's DAX 0.38%, France's CAC 1.67% and Britain's FTSE 1.49%.

The dollar was this morning buying 71.97 US cents.

TRADING THEMES TODAY

INDEX EXPIRY AND FED BETS: Prepare for fun and games in the pre-market buy/sell queues on ASX 200-listed stocks this morning as the September SPI200 contract expires. Ignore the wild swings and thread titles saying things like "Wow! BHP set to rocket/collapse today!" Prices will settle just before the open. After that, it looks we have a platform for a nice move higher - commodity prices improved, the dollar rallied back towards 72 US cents and overhead resistance on the index is some distance away. Caution may set in ahead of the close, even if most of the overnight indications are that the Fed will sit on its hands tonight. There are still plenty of contrary opinions on the overnight news wires willing to bet that the FOMC will hike.

ECONOMIC NEWS: The RBA releases its quarterly bulletin at 11.30am EST. Tonight's US session is all about the long-awaited Fed rate decision and policy statement at 4am EST. Also scheduled during a busy session tonight: building permits, housing starts, weekly jobless claims, current account and Philly Fed Manufacturing Index.

Good luck to all.