Gold broke the $2,000 barrier and bonds rallied to near record levels overnight as markets looked to potential concerns. China announced it will review its phase-one trade-deal with the US this month, heightening trade dispute fears.  Domestically, the US parliament is divided on an extension to its fiscal support package, raising worries that the US economy will hit a brick wall amid rising Covid-19 infection rates.

The move higher in bonds puts US ten years near the all-time spike high in March this year.  Along with elevated gold prices, bonds are signalling higher concern for the global growth outlook, with obvious implications for risk assets like shares.

A surprisingly softer USD boosted commodity prices. Base metals lifted alongside precious.  Crude outperformed after a massive explosion in Beirut lifted fears of Middle East instability, although later reports indicate an industrial accident caused the damage, rather than a hostile act.

Stocks rose on better than forecast earnings reports, with BP leading European stocks. In the USA Prudential, Fox and Western Union all delivered earnings above forecasts. Western Union reported a 22% lift in online revenues helped offset a 12% decline in consumer to consumer revenues, the overarching theme of the season as digital overtakes analogue.

Other major reports overnight included Walt Disney, Beyond Meat and Ralph Lauren. Tonight brings Wynn Resorts, Borg Warner and potential vaccine manufacturer Moderna. The Australian company reporting season gets underway tomorrow.

Asia Pacific trading may be shaped by data releases today. New Zealand unemployment dropped to 4.0% in the second quarter, well below forecasts. However softer wages growth offset the stronger job growth, and NZ’s shares are trading close to flat. The session also brings Australian home lending data for June (forecast 0.0%), the Caixin services PMI (f/c 58.1), and June retail sales in Singapore (f/c-28.5% yoy).

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