Market action diverged overnight after a fiery speech from US President Trump. Bonds rallied, gold steadied, and oil and copper fell, suggesting rising risk aversion. However European shares pushed higher, and US indices finished in the green in pro-growth moves. Currency markets are becalmed.

The mixed signals may have their roots in President Trump’s rhetoric. Although he threatened increased tariffs if a deal is not done, he also said a deal is close. The President called on the Federal Reserve to devalue the US dollar, but talked up recent US growth. A widely-reported inflammatory comment that “Nobody’s cheated better than China” is likely to give Beijing pause. The trade clock is ticking.

This leaves Asia Pacific markets in a quandary. Japanese and Australian bond futures rallied at this morning’s open, but Korean bonds sold off. Stock futures point to opening gains for Australia, and New Zealand is up 0.5%. These moves provide a contrast to indications of opening weakness in Japan and China. Cautious trading could be the order of the day.

The Reserve Bank of New Zealand will release an interest rate decision today after its final meeting for 2019. Interest rate markets and analysts are on balance expecting a cut to the cash rate to a record low of 0.75%, but the picture is complicated by a lower Kiwi dollar, and a cut is not a foregone conclusion. The mid-session announcement could be the key market event in the region today.