Brent crude oil surged to for year highs overnight and dominated market action. Energy stocks added to recent gains and industrial shares came under pressure. Currency markets remained calm, although the oil-sensitive Norwegian Kroner showed signs of being overbought. Meanwhile, in the US, the ten year bond yield once again flirted with the breakout point at 3.126%

Asia Pacific share markets are set for mildly positive starts, although the return of Hong Kong traders from yesterday’s holiday may see some elements of catch up in today’s trading. Overnight falls in industrial metals markets may offset any positivity generated by higher oil prices.

Trading in all markets may see lower volumes and volatility ahead of tonight’s much anticipated interest rate announcement form the US Federal Reserve. A 0.25% lift in cash rates is baked into the market pie. However any hawkish comments accompanying the decision could see interest rate markets react strongly and likely send ripples through all markets.