Comments from the US Federal Reserve chairman that interest rates were far from neutral sent the US dollar soaring and sparked a bond market sell-off overnight. Commodities came under pressure, although major share market indices registered modest gains. The surge and subsequent reactions will likely swamp Asia Pacific markets today.

Both the New Zealand and Australian dollars are trading at lows not seen since February 2016. Lower regional currencies may support share trading today. Futures markets are pointing to stock gains across the region, although then week long holiday in China may once again see subdued volumes.

Bonds are likely to feature today. Steeper yield curves and higher long rates may give investors pause. In contrast, oil prices hit new four highs during North American trading, despite the year’s strongest build in US inventories. Support for energy stocks may offset pressure on interest rate sensitive sectors.