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Wall St closed higher overnight following the release of positive US inflation data. The Dow Jones closed 0.61% higher, the S&P500 closed in the green for the 5^th straight day, up 0.38% and the tech-heavy Nasdaq rose slightly by 0.03%.

US core inflation data which excludes volatile items such as food and energy were released overnight, coming in at 3.2% year-on-year which was 0.1% lower than the forecast and previous result of 3.3%.

Over in Europe, markets closed higher as investors digested key inflation figures coming out of both the US and UK. The STOXX600 closed 0.43% higher overnight with travel and leisure stocks rising 2.89% and mining stocks leading losses, down 0.97%. Germany’s DAX rose 0.41%, the French CAC rallied 0.79% and over in the UK the FTSE100 gained 0.56%.

Key UK inflation data was released overnight, coming in below expectations for July at 2.2%, however this is still above the Bank of England’s target of 2%.

Locally yesterday, the ASX200 closed 0.3% higher by market close. Gains were led by the health and information technology sectors which rose 1.68% and 1.59% respectively. This was offset by the materials sector which saw a loss of 1.87% by the closing bell.

What to watch today:

• The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.36% at market open this morning.
• On the economic calendar today, Australian unemployment data for July will be released with a consensus and forecast to remain at 4.1%, the same as its previous result.
• On the commodities front this morning,
  • Oil is trading 1.28% lower at 77 US dollars and 35 cents a barrel after the EIA reported an increase in US crude oil inventories that rose by 1.357 million barrels last week.
  • Gold is trading 0.66% lower at 2447 US dollars an ounce and iron ore is trading 0.23% lower at 100 US dollars and 44 cents a tonne.

Trading Ideas:

• Bell Potter maintains a buy rating on Seven Group Holdings (ASX:SVW) and has increased its 12-month price target to $46. The buy rating is maintained by Bell Potter, following the announcement of results by SVW which included an underlying NPAT attributable to owners of $850m, up 30% year-on-year and exceeding Bell Potter’s forecast of $822m. As well as this, SVW’s business and investments are market leaders in their respective industries, with scale, brand and industry expertise underpinning commercial advantages that are hard to replicate by competitors. Bell potter remains positive on the near-term outlooks for mining production, engineering construction and transitional energy markets, hence the buy rating is maintained.
• Trading central has identified a bearish signal on BlueScope Steel (ASX:BSL), indicating that the stock price may fall from the close of $19.84 to the range of $16.80-$17.40 on a pattern formed over 31 days, according to the standard principles of technical analysis.