Overseas, the US markets rally came to an end on Wednesday as treasury yields rose to multi-year highs amid concerns the Federal Reserve will remain hawkish for months to come which in-turn raises the risk of a recession. The market sell-off dampened strong earnings reports from Netflix and United Airlines as an analyst at Morgan Stanley says earnings forecasts for this reporting season had been ‘cut to the bone’ so beating forecasts wouldn’t be hard as companies had already factored in rising interest rates and other impacts into outlook for the reporting season. The Dow Jones industrials index fell 0.33%, the tech-heavy Nasdaq dropped 0.85% and the S&P500 closed the midweek session down 0.67%.

Over in Europe and the UK, the four-day rally also ended after UK inflation data for September rose again to 10.1% after an unexpected decline in august. Food, energy and transport costs drove the rise in inflation, with the country’s cost of living continuing to hit residents and businesses hard especially before the winter months. The increase in inflation enhanced investor fears of a recession in the region as further interest rate hikes are expected to cool the rising inflation. The FTSE100 fell 0.17%, Germany’s DAX lost 0.19% and the French CAC closed the midweek session 0.43% lower.

What to watch today:

• The SPI futures are anticipating the ASX to follow the global sell-off by opening 0.7% lower.
• On the commodities front, brent crude oil has rebounded from recent day declines to trade 2.67% higher at US$92.43 per barrel, iron ore is trading flat at US$95 per tonne, and gold is trading 1.44% lower at US$1629 per ounce.
• The Australian dollar has strengthened to 68.08 US cents, 55.17 British Pence, 93.98 Japanese yen and 1 New Zealand Dollar and 11 cents.
• In economic data Australia’s unemployment rate for September will be released at 10:30am AEDT with the market expecting a decline to 3.4% for September, from 3.5% in August.

Trading Ideas:

• Trading Central has identified a bullish signal on Chalice Mining (ASX:CHN) following the formation of a pattern over a period of 46-days which is roughly the same amount of time the share price may rise from the close of $4.17 to the range of $4.95 to $5.15 according to standard principles of technical analysis.
• Trading Central has also identified a bullish signal on Azure Minerals (ASX:AZS) following the formation of a pattern over a period of 92-days which is roughly the same amount of time the share price may rise from the close of $0.29 to the range of $0.40-$0.42 according to standard principles of technical analysis.