Investors expressed a clear preference for safe havens in overnight trading. Bond yields fell again, in many cases to record lows. The Yen rose, and gold lifted back over US $1,500 an ounce. In contrast, stocks, industrial commodities and commodity currencies all fell as growth aversion hit trading in fear of further global disruption focussed on South America.

A benign and in-line read on German inflation led to a calmer European session. However a damaging market reaction to weekend elections in Argentina spooked American markets. The party of President Macri suffered a poor result, seen by many as a harbinger for the presidential elections in October. The shift towards protectionist parties led investors to dump stocks and bonds as the spectre of default haunted trading. US indices fell around 1.5% on the increased regional risk.

Asia Pacific markets are set to unwind yesterday’s gains. Futures are pointing to opening losses around the 1% mark. Regional currencies, except the Yen, are weakening against the US dollar. While this may ultimately bring global support for local assets, the current trend could keep potential investors side-lined in the short term.

Companies reporting today include Hong Kong listed Tencent Holdings and Australian fund managers Magellan (MFG) and Challenger (CGF). The contrasting fortunes in the wealth management space are on display. MFG is trading near all-time highs, and is in suspense due to a capital raising this morning. CGF is trading at 4-year lows. It reported a 5% fall in net profit and $2 4 billion lower FUM after a 9% reduction in advisers. Management spelled out an ongoing growth strategy and a positive outlook.