The balance between re-infection fears and central bank supported optimism tilted towards risk aversion overnight.

Bonds rallied and the US dollar rose again as some investors battened down the hatches. European stocks fell, and US stocks fluctuated around square, although industrial commodities moved gently higher.

Traders focused on the British pound. The Bank of England kept rates on hold but expanded its bond purchase program. The additional liquidity put sterling into a tailspin, and it shed a US cent after the announcement. The yen once again held ground against the US dollar, highlighting the preference for haven currencies.

Crude oil, copper and iron ore all made modest gains overnight. The lift is more impressive given a stronger US dollar. Gold essentially marked timed, moving slightly lower as the dollar rose. Oil traders are looking for further demand recovery as the US enters the summer “driving season”.

Shares futures indicate a positive opening for Japan, while Hong Kong futures finished the night session unchanged. Singapore, New Zealand and Australia are facing selling pressure. Japanese inflation data was broadly in line, and unlikely to change today’s direction. The Australian Bureau of statistics will release preliminary retail sales data for May, ahead of Canadian retail sales tonight.