Markets sentiment diverged across asset classes in overnight trading. Shares surged on positive developments in virus treatments and better than expected reports from the likes of Volkswagen, Boeing and Facebook. Crude oil rose, and other industrial commodities such as copper and zinc echoed the pro-growth moves. Currency markets moved in synch. However bonds and gold rose again, illustrating a divergence in sentiment.

Tech shares are driving the US gains. The Nasdaq index is now down just 1% for the year, although still around 7% lower than the February high. Microsoft benefited from increased cloud use. Alphabet saw advertising revenues decline, but an increase in YouTube activity. After the market closed, Tesla reported its first Q1 profit ever, potentially adding further momentum to recent tech strength.

The US dollar and Japanese yen retreated as investors moved away from safer havens. Commodity based and higher beta currencies such as the Australian, Canadian, New Zealand and Singapore dollars rose. USD/SGD and USD/CAD are threatening key supports, while the Kiwi and Aussie are through major resistance. Cryptocurrencies are under modest pressure this morning after recent solid gains.

Brent crude oil leapt more than 10% as pressure on West Texas June futures evaporated. WTI futures are adding to the session gains in after-hours trading.

These moves indicate a stronger day for Asia Pacific markets, and share index futures are higher across the region. China PMI data is released around mid-session and could be highly influential. Both the manufacturing (forecast 51.0) and non-manufacturing (f/c 52.0) reads are expected to show modest expansion in April. Any upside surprise could fuel further global optimism on post-Covid19 recovery prospects.

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