Surging oil prices and new record highs for US stocks indicate a positive start to share trading in the Asia Pacific region today. However important data reads in China and Australia could see sentiment swing over the session. Currency markets are also in play ahead of a bank of England interest rate decision tonight. A stronger US dollar and pressure on bond markets suggest some investor nervousness ahead of next week’s FOMC meeting.
The International Energy Agency’s assessment of increased demand for oil over the next eighteen months lifted risk assets generally. Calm trading saw modest rises across the Northern hemisphere. Asia Pacific markets led the globe this week and may have already priced the overnight gains.
Industrial production and retail sales in China are forecast to show stable to slightly higher growth, supportive of market gains. Australia’s employment market is estimated to have increased by 20,000 jobs in August, keeping the unemployment rate steady. Any divergence from expectations could chance the course of trading, although weakening currencies could see marginal international support.
Although a positive start to trading is expected concerning signals from the bond market could see investor caution take over. Australian investor worries are exacerbated by an index position much closer to the top of the tight four month trading range.