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Bank selling and disappointment that US markets failed to build on the previous day’s gains have delivered a nervous start for the ASX 200 this morning.

While bank stocks remain within the range of recent days’ trading, traders will be watching for signs of ongoing momentum that might push both bank stocks and the ASX 200 below support levels.

Wesfarmers’ decision not to sell Officeworks highlights a key question for investors in discretionary retail stocks. Has the market overestimated the risk associated with Amazon’s increased presence in Australia?  Good strategic operators like Wesfarmers and JB Hi-Fi will have had plenty of time to ready their businesses by the time Amazon does get to fully ramp up its Australian operation although some margin pressure looks inevitable.

Dulux has delivered a solid half year result this morning. Investors are likely to be content with market share and margin gains in its core paints division. However, good news has already been anticipated with the stock up 7% in recent weeks.

US Dollar weakness has been a key feature of the market landscape over the past 24 hours. Three months ago, few would have foreseen the Euro being supported against the US Dollar on the basis of Europe’s relative political stability

Aussie Dollar traders will have a watching brief on this morning’s wage index data. However, this is expected to remain sluggish and traders are likely to be cautious ahead of tomorrow’s much more volatile employment growth data. 

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