Emerging economic optimism was trounced overnight. European manufacturing contracted further in March, adding to concerns about the slashing of banks dividends to zero. The US President said the country faced “two bad weeks” ahead, a shift from previously more positive statements. Shares fell and Brent crude oil dropped another 6% amid reports of stubbornly persistent viral infection rates.

The Reserve Bank of New Zealand has joined regulators in the UK and Europe in insisting banks stop paying dividends to shareholders. This regulatory response looks heavy-handed in light of banks much stronger capital positions, attempts by governments to put money in the hands of consumers and central bank commitments to provide liquidity to the global financial system.

One interpretation of the moves is that regulators are covering their reputational risk at the expense of bank shareholders. Regardless, the overnight pressure on banks share prices is likely to flow into Asia Pacific trading today.

However early trading in this region shows how unpredictable markets have become. After an initial slump, New Zealand shares have recovered to a more modest loss of 1%, and West Texas crude is up 5% in the US overnight session. Equally, gold fell and bonds are mixed despite the souring sentiment.

Extreme volatility was the signature of the early days of the virus crisis. Market behaviour is evolving, and huge intraday swings and counter-intuitive reactions to news flow may be the new signifiers of the ongoing concern and uncertainty.