After a night of positive trading in Europe and the US futures markets have turned suddenly negative. Reports that the White House is readying to impose a further $200 million in tariffs as early as today saw gains turn to losses. Longer bonds are rallying as markets once again focus on potential drags on global growth.

Currency markets reversed initial US dollar strength and Yen weakness. The Australian and New Zealand dollars both u-turned after recent rises. Commodity markets generally avoided the positive upswing, and have less to correct, although oil markets are under pressure after overnight gains. Gold has caught a bid in a further sign that investors are heading for boltholes.

The sudden swing in sentiment means growth exposed and higher valuation stocks may be vulnerable in Asia Pacific trading today. Materials and energy stocks are a particular focus given the sluggish performance of base metals, and Australian financial stocks will receive scrutiny on the back of home lending data due late morning. Markets in Hong Kong and Shanghai may outperform given their previous corrective falls.