Industrial commodities dropped in overnight trading, led by a 3% tumble in crude oil prices. Souring sentiment dragged European and US shares lower, despite better than expected data. Commodity currencies and bonds are under pressure as the Asia Pacific region faces another holiday affected trading session.

Markets ignored stronger than forecast German retail sales, Italian and French manufacturing indices and US factory orders. The moves may represent risk reduction ahead of tonight’s influential US non-farm payrolls read. Consensus centres on the creation of around 185,000 jobs in April, but any meaningful divergence will speak directly to Fed intentions and therefore market outlook.

Despite the overnight weakness Australian share market futures are indicating a positive opening. However the pressure on commodities may mean this is a misleading signal. Both the New Zealand and Australian dollars are under pressure at key support levels. The Kiwi is currently holding above 66 US cents, but the session could turn ugly with the Aussie already sliding below 70 US cents.

Macquarie Bank reported an estimate beating 17% lift in full year profit this morning. However its shares are already trading at all-time highs, and may struggle to record further gains despite the good result.

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