Investors sold assets across the risk spectrum in overnight trading as ECB meeting minutes focussed attention on the coming withdrawal of stimulus. While higher interest rates hurt valuations, the draining of trillions of USD, JPY, EUR and CNY from the global monetary system attacks the foundations of markets trading near all-time highs. Investor nerves are fraying ahead of this potentially high market-impact event.

European shares fell after the minutes of the recent ECB meeting showed continental central bankers are on the same page as their Asian and American peers. Exiting the largest monetary expansion in history is an imperative and a threat. Bonds are also under pressure. German ten year bunds yields rose to levels not seen in eighteen months.

Last night’s US data perfectly encapsulated the current economic conundrum. The services PMI confirmed ongoing expansion in the US, but ADP jobs data disappointed. Around the globe an ongoing increase in activity is only weakly lifting employment, and both wages and prices are showing little signs of life. A low inflation environment endangers the withdrawal timetable and increases market risks.

Share and bond market futures are pointing to opening falls across the Asia Pacific region today. A weaker USD supported commodity prices overnigh5t, offering a sliver of hope that the Australian share market will moderate the negativity.