Against the backdrop of a bond market sell off US shares rebounded overnight as a range of indicators showed the US economy is doing better than many expected. European shares steadied as Deutsche Bank rallied, and another jump in oil prices supported energy stocks. Futures are pointing to gains across the Asia Pacific region, although volumes may be lighter as mainland China continues holidays.

Deutsche Bank shares climbed again to close above 12 Euro. This is more than 20% above recent lows, and embarrassing for the Chicken Littles of the financial world who just a week ago were solemnly ushering in another “Lehman Brothers” market event. Steadier investor nerves provided a launch pad for US markets when services activity, durable goods orders and factory orders all surprised on the upside.

US oil inventories continued to fall from the peak of 540 million barrels. A drawdown of almost 3 million barrels saw the stockpile slip below 500 million barrels for the first time since January. The consequent rally in crude pushed the energy sector to compete with financials as best performers, and both outstripped the broader market with gains of more than 1.4%.

Additional JPY weakness could see further gains for the Japan 225 index today. Locally, investors await an announcement from Estia Health following its suspension from trade yesterday. The company will re-state its first quarter numbers. Analysts fear this will follow recent negative trends in the aged care sub-sector, and trigger further selling.

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