Simmering Sino/US tension and the inability of the US government to pass Covid-19 support legislation had little impact on market action overnight. Crude oil and base metals rose, and most European and US indices gained, as gold and bonds edged lower. Futures markets point to a mildly positive start to Asia Pacific trading.

Currency markets took a polar opposite stance. The US dollar and Japanese yen rose, while growth exposed commodity currencies fell under pressure. Cryptocurrencies starred once again, with CMC’s Emerging Crypto index adding 5% to yesterday’s 4.3% gain, and Bitcoin briefly peeking over US $12,000.

Unusually, the Nasdaq index fell as the S&P500 and Dow Jones lifted. A rotation from tech stocks to cyclicals drove the divergence. Energy shares led as oil rallied on a positive demand outlook from Aramco. Ironically, Occidental Petroleum reported a US $6.6 billion write down, and a loss of $1.76 for the quarter. Last night’s reporting was generally bad news for energy stocks, with Duke Energy missing estimates. Royal Caribbean reported worse than forecast, and pushed back the re-start of most European cruises.

Singapore GDP data due this morning is forecast to show a 43% contraction in the second quarter of 2020. Any positive surprise could halt the slide in USD/SGD above the 1.37 support level. NZD/USD may also draw attention ahead of tomorrow’s Reserve Bank of New Zealand interest rate decision.