After exuberant European share trading US indices came back to earth. The emphatic rejection of far right parties in the Netherlands inspired continental traders, in contrast to clear indications that US budget negotiations will be difficult and protracted. However the improving global growth outlook continued to inspire commodity markets and US bonds further unwound the hawkish Fed trade.

Caution is the watchword in early Asia Pacific trading today. Nikkei and Australia 200 futures are indicating modest opening falls. However lifts in commodity prices and a potential Yen weakening may see both edge into the green by the end of the session. A 1.5% lift in iron ore and gains in copper and aluminium prices could see a focus on Australian miners today.

Currency traders are pointing to a potential “morning star” chart formation as a pointer to a reversal of recent Yen strength and USD weakness. A resurgent USD/JPY will likely provide support to shares in Japan.

The performance of the Hang Seng and Shanghai Composite indices could be a major influence on regional trading today. Yesterday’s lift in borrowing rates by the People’s Bank of China was easily absorbed but any investor re-think on the implications for shares is important.