A combination of weaker data and sabre rattling eroded investor confidence in Friday night trade. Asia Pacific investors are looking at a weak start to the trading week as investors favour defensive investments. The risk off flavour could see local markets trade lower than the 0.5% falls indicated by futures markets.

German industrial production and retail PMIs for France, Germany and Italy all disappointed on Friday night. US jobs numbers continued the theme with only 103,000 new non-farm jobs created in March against expectations closer to 190,000. This deterioration in the macro outlook will mean an intense focus on China and US inflation reads on Wednesday, as well as China trade data on Friday. US Fed minutes from the March meeting are released on Wednesday.

In Australia housing numbers on Thursday will speak to the broader economy and the banking sector. Lending in February is forecast to drop 0.4% following January’s 1.1% fall. The RBA will release its semi-annual Financial Stability Review report on Friday. Investors could respond to any further canvassing of residential lending issues.

Global investors largely took the latest US escalation of trade rhetoric mildly with the combined China / US sanctions now approaching only 5% of bi-lateral trade. There is a growing perception that the end goal is a new agreement rather than a severe disruption to global trade. However the sudden risk off moves at the end of last week points to a higher degree of investor sensitivity to bad news.