A reassessment of the ECB stance, and the possibility of more long term bank lows sparked a rally across Europe on Friday night. The rally extended through the American session as both Beijing and Washington issued positive statements about the ongoing trade talks. However these drivers contradict each other, and Asia Pacific investors may respond with less enthusiasm today.

The Euro traded to eighteen month lows and UK, German and French bond yields fell to twelve month lows, reflecting the low growth, high central bank accommodation dynamic lifting asset prices. In contrast the US session saw a pro-growth stance, indicated by steady bonds and slightly softer precious metals, and stronger support for higher growth shares, oil and industrial metals. Although the US dollar gained against the Euro, the Australian dollar rose further, alongside iron ore and energy prices.

The US reporting season is now around 80% complete. Sales growth around 6.5% and earnings growth near 11% is supportive of recent share market gains. In Australia, reporting will cross the half way in the busiest week of the season. More than 70 of the top 200 companies report to shareholders. In early results Ansell has come in below forecasts, and both NIB and Brambles slightly above.

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