Last night the European Central Bank lowered its growth estimate for 2019 from 1.6% to 1.1% in a statement accompanying its decision to keep European interest rates at 0.25%. Despite announcing an extension of long term lending to banks, investors fled. Shares dropped, commodities came under pressure and the Euro slumped, while German ten year bond yields hit two year lows.

The sour sentiment seems likely to infect Asia Pacific markets today.

US markets followed their European counterparts in the absence of any news on trade negotiations. Tech shares were particularly hard hit and the Nasdaq index dropped more than 1%. A seventh day surge in the US dollar added to the pressure on risk assets. However trading volumes were lower, possibly reflecting the event risk for markets around tonight’s release of non-farm payroll data.

Futures markets are pointing to opening falls of around 0.5% for regional indices. However lower local currencies such as the Australian, New Zealand and Singapore dollars may come to the rescue later in the session. Japanese GDP data is expected to confirm a pick up in the annual growth rate from 1.4% to 1.7%, ironic in light of falling growth rates elsewhere.