Strong action in commodity markets and resource shares more than made up for a listless day for US indices, setting the stage for a potentially active day for Asia Pacific trading. WTI crude oil had a big day, retesting $91.00 support then staging a big relief rally. Natural gas on the other hand, sold off and lost nearly 3% on news of a high than expected storage build last week. Metals remained under pressure with copper falling on concerns over Chinese demand. Grains, meanwhile took a big tumble after the monthly US crop report suggested the potential for lower prices and higher stockpiles. The action in resource stocks today was particularly intriguing. One would have expected the resource heavy Canadian market do be down on the day but it finished up and the boost came not from the energy sector but from the mining sector which saw some major gold and copper producers post 1% plus gains. This is significant because stocks have historically tended to lead commodity prices. The mining stock and WTI rebounds suggest that recent selloffs may have been overdone setting the stage for possible trading bounces to relieve short-term oversold conditions. It’s possible that we may see this action follow through into Australian trading where traders may weigh the mining stock rebound in North America against concerns over whether Chinese retail sales and industrial production reports coming over the weekend may right the ship or confirm other signs of weakness seen this week. The S&P/ASX and Hang Seng have been rolling over this week, along with AUD and NZD reflecting the concern that China’s economy remains sluggish. All of these markets plus copper could be active today as traders position for the data and then again to kick off next week when they get a chance to react to the numbers. Economic News Significant announcements released overnight include: US natural gas 92 BCF vs street 85 BCF US jobless claims 315K vs street 300K Canada new house prices 1.4% vs street 1.6% US monthly USDA crop report: Wheat farm price cut to $5.50-$6.30 from $5.80-$6.80. Sept end stocks raised to 698M tons from 663M Corn farm price cut to $3.20-$3.80 from $3.55-$4.25. Sept end stocks raised to 2002M tons from 1808M Soybeans farm price cut to $9.00-$11.00 from $9.35-$11.35. Sept end stocks raised to 475M tons from 430M Upcoming significant announcements include: 8:30 am AEST NZ manufacturing PMI previous 53.0 8:45 am AEST NZ food prices previous (0.7%) 9:00 am AEST South Korea unemployment street 3.4% 11:00 am AEST South Korea interest rate 2.25% no change expected 2:30 pm AEST Japan industrial production previous (0.9%) 8:00 am BST Spain consumer prices street (0.5%) 9:00 am BST Italy industrial production street 0.1% 9:30 am BST UK construction output street 3.2% 10:00 am BST Eurozone industrial production street 1.4% 8:30 am EDT US retail sales street 0.6% 8:30 am EDT US retail ex auto street 0.3% 9:00 am EDT Canada house prices previous 4.9% 9:55 am EDT US consumer confidence street 83.3 TBA China new Yuan loans street 700B 3:30pm AEST Sat China retail sales street 12.1% 3:30pm AEST Sat China industrial production street 8.8% 3:30 pm AEST China fixed assets street 16.9%
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