Australian investors face a day of conflicting currents. Stocks fell in Europe and the US but important metals rose, pointing to broad market pressure hitting support for resource stocks. The Asia Pacific region is likely to face more selling today after US retail sales disappointed overnight.
Data conflicts could be a key issue for markets. China industrial production jumped by 7.2% in February, yet US inflation and consumer numbers missed their mark. The softer US outlook drove bond yields lower. However unimpressive gold trading suggests there is little investor concern about inflation or the need for safe havens. Oil, copper and iron ore all rallied after the China data, and this stronger current may see regional markets perform better than their global peers.
Currency markets remain becalmed and major pairs continue to trade sideways. Interest rate levels indicate a rate hike from the Fed next week is a certainty, with concerns that unemployment will hit record lows the latest fuel on the hawks’ fire. Asia Pacific share market futures are in the red, but lighter volumes and a “bottom up” approach from investors lift the potential for fluky trading today.