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Set to Sell

Asia Pacific investors are bracing for a sell day after European and US traders took some hard won risk off the table. Perceptions of a continuation of the central bank induced rising tide lifted the boats last week, but a more nuanced final session saw shares and oil fall as bonds and gold rose. This thematic could see further support for dividend paying banks, property trusts and telcos, and pressure on growth exposed resource stocks today.

Local investors face a dearth of data this week. Instead, Japanese inflation and production numbers, and US durable goods orders, could set the economic tone ahead of China manufacturing data due at the end of the week.

At the risk of message dilution, Fed board members up to and including chair Yellen are speaking in the wild. Governor Kuroda of the BoJ will speak, and the ECB’s  Mario Draghi faces policy makers in regular testimony. Traders expect the net effect to include increased opacity and contradiction.

Weaker leads following a 4% + rise in 8 trading sessions may see an opening drop greater than the 24 points forecast from the futures market. Support later in the session as the rest of the region comes on line may reflect further regional investment in higher Australian yields. The AUD/USD and AUD/JPY pairs could lead the Australia 200 share index today.

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