Here's your 20-second guide to what Australian traders will be talking about this morning

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Quick Recap:Commodities were under pressure again last night with oil crashing a spectacular 3.71% for the front Nymex crude contract. Copper and other base metals were also lower and gold is back flirting with the technically important $1,085.

It seems the culprit might be the growing concerns about the state of the Chinese economy after the Markit China PMI yesterday printed even weaker than the “flash” result a week before. But Westpac’s New Zealand based strategist Imre Speizer reckons that S&P’s downgrade of the EU “may have been a marginal influence” as well.

In the end we have stocks in the US down, the FTSE also slightly lower but European stocks higher, ignoring the crash in Athenian stocks. Currencies are fairly quiet but the commonwealth bloc (GBP, AUD, NZD and CAD) all lost ground against the US dollar. On rates markets the rally continued.

The overnight scoreboard (7.24am AEST):

  • Dow Jones -0.52% to 17,598
  • Nasdaq -0.25% to 5,115
  • S&P 500 -0.28% to 2,098
  • London (FTSE 100) -0.11% to 6,688
  • Frankfurt (DAX) +1.19% to 11,443
  • Tokyo (Nikkei) -0.9% to 20,548
  • Shanghai (composite) -1.11% to 3,622
  • Hong Kong (Hang Seng) -0.91% to 24,411
  • ASX Futures overnight (SPI September) flat at 5,612
  • AUDUSD: 0.7276
  • EURUSD: 1.0951
  • USDJPY: 124.02
  • GBPUSD: 1.5583
  • USDCAD: 1.3159
  • Crude: $45.30
  • Gold: $1,086
  • Dalian Iron Ore (September): 416.5

Now the news On the data front in the US the ISM manufacturing data was weaker than expected falling to 52.7 from 53.5 last month. But Commsec’s Craig James said that “the new orders sub-index lifted to a seven-month high,” which is more encouraging. Less encouraging though is that “US consumer spending rose by 0.2% in June – its smallest gain in four months,” while “personal incomes lifted by 0.4% in June.” The Markit PMI in the US was in line with estimates at 53.8 and the Markit manufacturing PMI’s for most of Europe were either at or above expectations

– That European data, and some solid earnings reports appear to have helped European stocks move higher overnight. Certainly the continental performance belied the moves in Asia and the US overnight and of the major European bourses we watch only the FTSE 100 in the UK was in the red. Speaking of red the Athenian stock exchange opened after 5 weeks and got hammered. Banks were under particular pressure. But no one is surprised and the move could have been worse. So traders around the globe won’t be overly worried.

– In the US stock markets were lower with oil getting a fair share of the blame in most commentaries this morning. That’s certainly the case but it’s hard for traders to ignore what China’s now obvious slowdown, regardless of what the official figures say, means for the global economy. That, along with a strong US dollar is a threat to earnings. That should cap rallies or as Raoul Pal, ex-hedge fund manager and founder of Global Macro Investor, tweeted this morning traders are getting a bit worried about risk in stock markets.

No, it’s not just you Raoul.

– Even Chinese traders can’t ignore the weak economy and yesterday’s PMI print. That helped the Shanghai composite finish more than 1% lower yesterday. That’s taking it dangerously close to the low we saw after the recent crash. Traders will be wondering what’s going on. Or, as I wrote in my Go Markets Asian trading wrap yesterday, even though what they are doing is difficult to fathom US casino mogul Steve Wynn, who knows a thing or two about punters, reckons he knows where the authorities are going wrong.

Bob Bryan, one of my colleagues from Business Insider US wrote an article on Friday night NYC time highlighting Wynns thoughts.

Casino billionaire Steve Wynn thinks that all this intervention is a big mistake.

“I am not an expert on China and I’m not even a Wall Street expert, but I am a person who’s been in a public company for 40 years,” Wynn said during an earnings call on Wednesday. “And my own experience, had I been consulted, I would have said don’t do that exactly. Because if someone thinks that you’re going to close the door on their ability to sell or trade their shares, you can only do that for a certain length of time and then the minute you finish doing it, the people scamper for the door because there’s a loss of trust.”

You can’t hold back the tide.

– The Chinese issues and a weak lead from the US didn’t give local traders any reasons to be excited about buying yesterday and the market ended down a little. Futures today are pointing to the market taking its cues from the very important retail sales data at 11.30am and the RBA at 2.30pm. The ASX has been uncommonly strong recently and retail sales might just reinforce that recent strength.

– Now to the deflationary pulse we are getting from the continued crash in oil and base metals. NAB senior economist David deGaris summed up the oil move and its impact on forex and other commodities nicely in the NAB’s morning note today.

Oil took centre stage last night with West Texas Intermediate down 3.8% to $45.33/bbl and Brent crude down a cool 5.0% to $49.60, WTI the lowest since March 19 and Brent below $50/bbl for the first time since January when oil selling was at its most intense. Continued over-supply and fears of slowing demand seemed to weigh on sentiment. Iran announced they would/could immediately lift exports by 0.5mbpd if sanctions while renewed softness in Chinese manufacturing stoked demand side concerns.

Commodity currencies came in for some treatment as a result with the Rouble (-1.6%) hit hard, along with the NOK (-0.41%), AUD (-0.38%), and NZD (-0.33%) all lower. The CAD for once held up. Other traded hard commodities also eased, LME metals prices declining, copper down 0.19% and nickel by 2.67%. Gold also eased, by 0.86% to $1085.90/oz. Iron ore prices bucked the trend, up $2.22/t yesterday in China. US energy stocks closed down by 2.01%; other industry groups in the S&P 500 were mixed…

– These moves are a complication for plans of the Fed and BoE to raise rates soon. But September still looks in play for the Fed given current settings in the employment market. But more commodity market weakness, and the associated downward pressure on global inflation, could stay their hand. Whether or not it does is open for debate. But it certainly will truncate the size of the potential move and possibly slow subsequent moves to the first one in 2015.

– That’s something that interest rate traders around the world haven’t missed. US 10’s rallied a few more points to end at 2.15%, German 10 year bunds are off 2 to 0.59% and UK rates closed at 1.89%. Domestically the 10’s are at an amazing 1.69% while the 3’s are at 1.87%.

– On the data front today we get Australian trade and retail sales for June along with the RBA decision. Currency traders will be watching closely for any hints from the RBA given recent moves. PPI is out in Europe tonight and then in teh US we get factory orders and ISM New York.

And now from CMC Markets’ Ric Spooner is today’s Stock of the Day

Woodside Petroleum (WPL.ASX)

The relationship between oil prices and Woodside’s revenue is not straight forward given factors like the delayed impact of oil prices on the prices of Woodside’s main product, LNG and the benefits of a falling $A. That said falling oil prices are a negative and the energy sector led the US S&P 500 lower last night, being sold off 2.1%.

Woodside’s share price has traded within a broad sideways range since February. Resistance is at $36.80 and support around $34. On Friday, it peaked neatly at its 200 day moving average at $35.90 suggesting that with a little patience, potential buyers will have a fair chance of getting an opportunity to get set closer to the trading range support.

Ric Spooner, chief market analyst, CMC Markets

You can follow Ric on Tw

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