Investor sentiment swung 180 degrees in overnight trading. After a risk rally over the previous session, shareholders fled for the exits and safe haven assets soared. Reports of the first Covid19 related deaths in the UK and Switzerland triggered a rout on European exchanges, then reports of new outbreaks in Seattle, NY state and New Jersey spooked US investors. US indices closed down 3.5%, after trading more than 4% lower late in the session.

Weaker US national accounts data added to the gloom. Factory orders fell more than expected at -0.5%, and productivity and unit labour costs were both lower than forecast.

The market falls came despite clear signs of Fed support. The US dollar slid and the Yen starred, rallying one and a half big figures. German and US ten-year bonds traded back to all-time low yields. LME base metals defied the trend, with gains for lead, nickel, zinc and tin. However gold trading sounded a clear warning signal, lifting again towards seven-year highs.

Futures are pointing to a choppy opening for Asia Pacific markets. Japanese and Australian indices are looking at 2% tumbles, although Hang Seng futures are down just 1%. Australian retail sales numbers are due later this morning. Forecasts are centred on a flat January, although extreme weather conditions may mean there is downside risk.