Subdued risk appetites dominated overnight trading. Dovish commentary from the Bank of Canada and a US Federal Reserve beige book pointing to weaker US growth overwhelmed stronger German construction numbers. Shares came under pressure, bonds rallied and commodities fell. The moves were restrained, and currency markets remain calm.

Adding to the gloom US crude oil inventories surged by more than 7 million barrels over the week, partially offset by a 4.2 million barrel draw on gasoline. Energy shares were among the hardest hit overnight, with S&P 500 oil and gas companies shedding 1.3% collectively. Investors also fled the higher valuation Health sector. These moves may echo through Asia Pacific trading today.

The Australian and New Zealand dollars fell with the general risk off tone. Pressure from lower commodity prices was compounded by a modestly stronger US dollar.

No news is bad news on the US/China trade negotiations, and it remains the key risk for global markets. Any developments or announcements could prompt a sudden change in market conditions, potentially limiting trading ranges today.