Overnight trading was a game of two halves. European investors bought stocks on a weaker Euro and stronger than forecast economic data. The evidence in the US turned negative and so did shares. Industrial commodities largely followed suit, although oil was a notable exception. The strengthening US dollar dominated currency markets.

UK house prices grew faster than forecast and Italian consumer confidence and producer prices also exceeded expectations. The UK FTSE 100 led European exchanges higher, aided by a slide in the Euro. Investors often treat durable goods orders as a leading indicator, and disappointment at core readings in the US last night may have contributed to the weaker close after an initial buying impulse. Trade fears provided the backdrop.

A soft start to Asia Pacific trading is likely. Futures markets are in the red. Share markets in China have fallen most on trade concerns, and Australian shares among the least. The absence of any announcements on trade from the US may see this dynamic drive regional performance today. Lower local currencies may take some of the sting from any selling.

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