Overnight trading displayed elements of a risk off stance from investors. Gold and bonds rallied, shares and industrial commodities were marked down and volatility indicators rose. The trimming of risk positions comes against a background of rising geo-political tensions and the start of the US company reporting season.
A weakening USD is normally supportive of commodity prices. However industrial metals were smoked and oil pulled back from resistance despite a significant draw down in US inventories. The stronger Yen bodes ill for Nikkei trading today. Both the MAS in Singapore and the Bank of Korea will issue interest rate decisions today, but neither is expected to change. Futures markets are suggesting falls of around 0.5% across the region.
China trade data may have an impact if it diverges from the forecast 5% lift in exports and 15% year on year gain for imports. Consensus on Australian jobs is an increase of 20,000, causing the headline rate to edge down to 5.8%. There is an increased risk of market reversals during the session as volumes are expected to drop away ahead of holidays in various centres.
