Last night’s rotation out of US info tech stocks and into other sectors was motivated by tax reform moving with investors moving into companies likely to benefit most from tax cuts. While this is a move specific to US companies, it is a little unsettling to see concerted selling in the high value stocks that have led the stock market rally this year.

The 14 day RSI for Google’s parent, Alphabet, broke support last night after displaying bearish divergence with price. Investors will be alert to the possibility that this nervousness may spill over to local high value stocks this morning.

Shareholders in financial industry stocks will take their que from the bank boards and shift the focus of their risk attention to the question of the specific terms of reference of the Royal Commission into the sector now that it has been announced. However, the fact that the inquiry will take the form of Royal Commission, rather than a more politically vulnerable Parliamentary Inquiry, is likely to be seen as a positive for the industry. The Commission process is likely to result in a significant increase in regulatory costs for banks and other financial sector companies over the next 12 months, putting further pressure on the profit outlook .

Forex markets have three significant economic releases to assess today. This comes after a weak overnight session for AUDUSD, that was not helped by further selling in industrial metals. Markets may be hoping that the recent robust reads in the NAB Business Conditions and Confidence indices will translate into an improvement into actual and planned Capex for industries outside mining.  Building Approvals on the other hand may be due some mean reversions after recent surprisingly strong data. Markets will also be looking for domestic demand to prevent more than a minor slip in China’s manufacturing PMI