A lower US dollar, positive moves in European shares and rumours of new US tariffs leave investors between a rock and a hard place. Macro data remains robust but the potential for an escalation of trade disputes threatens market health. After a strong finish to last week futures markets are pointing to a mixed session for the Asia Pacific region today.

Markets are highly sensitive to any news on trade. Metals markets fell on Friday, and oil prices are lower this morning in what looks like a cautious start to trading. A lack of macro data means trading is likely to be dominated by headlines and speculation. Lower trading volumes and increased volatility are in order.

Bond markets are indicating a continuation of a pro-growth stance from investors. US ten year bonds are back at 3%, and threatening recent yield highs around 3.11%. A break higher may see further caution from investors despite the signal of accelerating growth.