After a gravity defying rise yesterday Asia Pacific shares are vulnerable to selling today. A second night of falls on European and US exchanges, rising bond yields and falling commodity prices could see a sharp reversal in local shares. If Asia Pacific markets do rise again today it could be a sign that global investor sentiment has shifted in favour of the region.

Potential support may arrive with economic data from China and Japan. Early trading will see Japanese trade and GDP numbers, but the focus is the mid-session release of China trade activity. Both imports and exports are estimated to show further strength in February, echoing January’s 15-17% increases. Any evidence of acceleration would not only support shares but also potentially re-ignite currency markets.

Increasing China activity will likely support industrial commodity prices as well. However this may not be enough to stop the rot in Australian resource shares given the ongoing down draft in gold and other precious metals. Nascent USD strength drove gold through key support at US $1220, and notoriously volatile Australian gold shares may prove an anchor on today’s share market performance.