Asia Pacific markets are looking at a soft start to trading ahead of important mid-session data from China. International leads are weak. Industrial metals bounced, but shares fell and oil markets had another torrid night. Despite positive surprises on European inflation the Euro made little headway against a strengthening US dollar. The Yen slipped as global investors retreated from the risk-off positioning of the previous days.
Italy’s MIB index fell the least of the major continental share market measures as politically inspired panic faded. The Fed’s preferred measure of inflation was bang in line with forecasts, and US consumer and unemployment data better than expected. However US shares slipped again as investors appeared to respond to the looming introduction of tariffs on steel and aluminium. Leaders of the EU and Canada hit back hard, and Mexico announced dollar for dollar counter-measures, raising trade war fears again. Steel makers stock soared.
Today’s trade could be data driven. News so far is mixed, with Australia’s manufacturing edging lower in May but Japanese capital spending higher than anticipated. Investors and commodity traders will look to Caixin China PMIs. Yesterday’s official numbers showed an accelerating economic expansion in May, and if this is confirmed by today’s private reads regional markets could see a positive finish to the week.