Weaker than forecast leading indicators in the US cruelled risk appetites in overnight trading. The falls came despite generally better than expected reads of activity indices in both Europe and the US, and in-line European inflation. The US dollar snapped its losing streak, bonds sold off and shares fell.

Department of Energy weekly data that showed a 3.7 million barrel increase in crude oil stockpiles added to the weight on growth exposed assets. The combination of data disappointment and a stronger US dollar hit commodities, and both precious and base metals retreated from recent highs.

The Australian dollar featured in currency markets. After an initial surge on stronger jobs data, it suffered double blows to slip below 71 US cents. An influential big bank economist changed his forecasts, and is now tipping two rate cuts before November. The selling accelerated as news filtered through that the Dahlian port in China placed restrictions on Australian coal imports. Although less than 2% of Australian coal exports go through this port traders fear it is part of a wider anti-Australian campaign by Chinese authorities.

Investors are still on alert as Australian corporate reporting rolls on. Charter Hall Group continued the dominant property theme with a stronger than anticipated result driven by better operating and revaluation. Traders will look to Resolute Mining’s result for further positive surprise from the gold mining sub-sector.

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