The Euro strengthened and European share markets rose in overnight trading after stronger than forecast data releases. The positive sentiment spilled into US trading, and the SPX 500 index traded almost 4% higher in the first hour of the session. However reports of increasing Covid-19 death rates soured sentiment, and US indices finished slightly in the red.

The reversal weighed on Asia Pacific futures, which now indicate negative starts in Hong Kong, Japan and Australia. The caution is reflective of a mixed night for other asset classes. European ten-year bonds sold off, but US tens held firm. Gold rose, but so did base metals, and the Japanese yen fell. The mixed signals suggest a polarisation of views around the global growth outlook, with some looking through the current economic disruption and others expecting worse to come.

Crypto currencies pulled back mildly after good gains over the last week. CMC’s All Crypto Index is threatening the 2,500 level as Bitcoin holds above US $7,000.

Australian winemaker Treasury Wine Estates announced the outcome of a strategic review to shareholders this morning. The demerger of the Penfolds brands into a new luxury focussed company and $1.1 billion in liquidity are the key takeaways for shareholders. However other aspects of the announcement hold broader implications. TWE reported subdued China demand, but its workforce is returning to nor mal operations. Importantly, the company no disruption to its supply chains, highlighting that some companies may recover from the current disruption quite quickly.

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