A sell off in bond markets took centre stage in overnight trading.  Longer dated bonds were hit hardest, undoing the much-discussed inversion of yield curves. The normalisation of interest rate term structures is remarkable in light of the European Central Bank’s decision due Thursday night. Gold slipped below US $1,500 an ounce and the Japanese yen weakened in further signs of a global shift away from safety.

Energy markets and select industrial metals were the major beneficiaries in the reversal of recent trends. Commodity currencies added to recent gains. Shares were mixed, possibly due to “first mover” gains over the previous sessions. Better than expected data from the UK and Germany provided impetus. A 0.7% lift in German exports (forecast -0.5%), and stronger manufacturing production and construction output in the UK, drew attention.

Data releases could play a significant role in today’s Asia Pacific trading session. China CPI (f/c 2.7%) and PPI (f/c -0.9%) will speak to the price impact of the trade dispute. In Australia the release of the privately calculated business conditions and confidence could illustrate shifting sentiment.

Australian bond futures are under pressure this morning, although share price futures are 9 points in the red. In contrast, traders are looking for opening stock gains in Hong Kong and Tokyo.