The overnight market action suggests market sentiment revived on higher risk appetites. On one hand, gold fell and the Japanese Yen weakened sharply, signalling investors are shifting away from safe-haven assets. On the other hand, tech shares lead the rally in US equities, while the rise in European stocks may have been driven by optimism as Italy struck a more co-operative stance.

The positive momentum and higher appetite for risk assets could spill over to Asia Pacific equities today. Futures markets are pointing to a modest gain for most regional stock markets but the Shanghai stock market could face opening pressure. However, investor selling could be limited as most geopolitical factors are subdued ahead of the G-20 Summit on Friday.  

Commodity markets were mixed overnight. Oil prices bounced from a 12 month low on the hope that Saudi Arabia and Russia may gain consensus on future oil production during the G-20 meeting. In contrast, iron ore futures slide further, and base metals such as nickel and copper extended losses. The slump in key industrial metals suggested investors may be cautious on the industrial outlook as international trade disputes persist. General pressure on commodity prices also weighed on the Australian and the New Zealand dollar. Commodity markets may remain sensitive to geopolitical events in the short run. In particular, any updates on the pre-negotiation between the US and China on trade matters could affect investor thinking.

The US dollar strengthened overnight and exerted pressure on most G-10 currencies. Movement in the US dollar may remain a key driver behind currency markets in the next 24 hours. A lack of major economic data could limit volatility. Nonetheless, the US Consumer Confidence Index due later tonight may be crucial as analysts look for signs of sustainable growth in the US retail industry.