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As traders looked ahead to the highly anticipated Federal Reserve meeting and new inflation data, US equities saw a strong session overnight. Stocks jumped back from last week’s steep losses, with a strong rally in the final hour of trade. The Dow Jones added more than 500 pints or 1.5%, the S&P500 up 1.4%, and the Nasdaq up 1.26%. The Fed will begin its two-day meeting tonight and it is widely expected that the Fed will raise rates by half a percentage point when the meeting concludes on Wednesday in the US.

However, European markets retreated ahead of the Fed’s meeting. The Stoxx 600 closed lower, with mining stocks falling the most, while only oil and gas stocks made gains. Germany’s DAX, France’s CAC and the FTSE 100 all closed in the red. Also, on Thursday we’ll receive monetary policy decisions from the Bank of England, the European Central Bank and the Swiss National Bank.

What to watch today:

• Following Wall Street’s strong session, the Australian market is set to rise 0.67% at the open this morning, going by the SPI futures.
• In economic data, today Westpac will release its data on consumer confidence for December at 10:30am and NAB will release its data on business confidence for November at 11:30am AEDT. This data will give us an indication on consumer and business sentiment, considering the impact that inflation and rising interest rates has had on households, finances and the economy.
• In commodities:
  • The oil price has sharply rebounded, recovering from the daily lows of around US$70, as optimism about China’s reopening and supply disruptions offset some concerns about a global recession-driven demand downturn. Oil is trading at US$73.48 per barrel, so keep your eye on energy producers such as Santos (ASX:STO).
  • The price of gold has fallen, ending a four-day advance as the US dollar gained on stronger-than- expected producer price data in the US. So watch gold mining stocks like Regis Resources (ASX:RRL) and Evolution Mining (ASX:EVN).
  • Iron ore is trading around 1.4% higher at US$111.50 per tonne.
• The AU$1.00 is buying 67 US cents, 55.39 British Pence, 92.93 Japanese Yen and NZ$1.06.

Trading Ideas: 

• Bell Potter maintain a BUY rating on Mincor Resources (ASX:MCR) and have lowered their price target from $1.90 to $1.85. At MCR’s current share price of $1.585 this implies 16.7% share price growth in a year.
• Trading Central have identified a bullish signal in DGL Group (ASX:DGL) indicating that the stock price may rise from the close of $1.48 to the range of $1.83 to $1.91 over 18 days according to the standard principles of technical analysis.