Weaker Chinese, French and German activity data kicked off ugly trading on Friday night. European investors fled share markets and oil and industrial metals came under pressure. US investors responded to the weak leads, despite stronger than expected domestic retail sales and capacity utilisation numbers. The US dollar strengthened and bonds rose, increasing pressure on commodity prices.

Asia Pacific investors are looking at a weaker start to trading. The US Federal Reserve’s interest rate decision due early on Thursday morning is a key event for global and local markets. While a 0.25% lift in US rates is widely anticipated it is the Fed’s view of the path for the US economy that could provoke a reaction. Any content that speaks to the difference between market pricing of one interest rate rise in 2019 versus previous Fed indications of three rises is very likely to move markets.

The current market debate has moved well into the future. It centres on whether the US is heading into a 2020 recession, taking the world with it. When the market focusses so far out in time there is potential for larger price swings as sentiment coalesces to one viewpoint, and then the other. Australian investors will turn to RBA meeting minutes released tomorrow for a local view on the current conundrum.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.