**10/09/10 - 8.208m - by James Gerrish**
We may see the S&P/ASX 200 break above 4600 today which would be a strong positive for the market. To be completely accurate, the high that we need to break is 4622 - This high that was put in place back in June. As it stands, the Futures market is suggesting a rise of 19 points and we've got the cash market trading at 4582.
Last night we saw stocks higher again after another sign that the labour market was improving. New applications for unemployment insurance fell by 27,000 to 451,000 - which is the lowest level since July 9 according to the labour Department. Adding to this, the US trade gap has dropped to its lowest level since early 2009 and this has occurred on the back of rising exports. This shows that US manufacturing is continuing to improve and this will continue to help the struggling labour market.
We spoke yesterday about the USD suggesting that it looks prime for some further weakness. A low USD has been supportive of the US manufacturing sector making exports more competitive internationally. Ultimately, a low USD is a positive for the US economy and we expect policy makers to be keen to ensure the greenback trades at historically low levels to further aid the recovery.
On the market last night, the DOW JONES added +28 points or +0.27% to 10415. The FTSE 100 was up strongly +64 points or +1.19% to close at 5494 and has now broken above key resistance. Locally, SPI FUTURES are 19 points higher.
We saw the Aussie Dollar trade to its highest level since April with the high of session put in place at 92.77c. This came after a very positive jobs report out of Australia yesterday that showed unemployment fell to 5.1% from 5.3% reaffirming the strength of our domestic economy. This figure will be relevant for Future RBA decisions as low unemployment puts upward pressure on wages which filters through to CPI data (inflation). Not a concern at the moment but could be a factor that prompts to RBA to raise rates before year end. UBS expects a rate rise in November of 25bp, and notes a heightened risk for a move in October.
Santos updated the market yesterday about its Gladstone LNG project. Santos has agreed to sell 15% of the GLNG project for $A650m however the details of the deal were disappointing - Send me an email should you wish to receive more information on the deal.
