A continuation of yesterday’s bargain hunting momentum and more good news on the US profit-reporting season should deliver a solid opening for the ASX 200 index this morning.

However, the index will need have to battle the headwind of selling in mining stocks.  Rising inventories in copper and iron ore have dented short-term confidence in industrial metals after strong gains. This means the Australian market will not be firing on all cylinders.  Some active traders are likely to be rotating out of mining stocks, looking for better value in other sectors.

Bank of Japan Governor Kuroda’s emphatic commitment to quantitative easing lent support to the stock market yesterday but was swamped by concerns over trade protectionism in currency markets.

Moves by the US to impose tariffs on solar panels and washing machines are likely to make trade protection a risk factor for the US Dollar leading into President Trump’s speeches at Davos and next week’s State of the Union Address. However, falling metals prices are also a headwind for the Aussie Dollar and have kept it oscillating around 80c against a weaker $US

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.