Concerns about bond yields triggered weaker stock prices; a rising $US and weaker metals prices over night. A weak result by Walmart added to nervous sentiment on US markets and the BHP result will have the same impact in Australia.

Stock markets have decided on defensive action while they asses the outcome of this week’s bond auctions in the US. This saw the S&P 500 index reject the 61.8% Fibonacci retracement level in a sign of short-term weakness.

The ASX 200 index has followed the weak off shore lead and is not being helped by a sharp decline in BHP. While BHP missed consensus expectations for underlying earnings, this was largely due to temporary cost factors. If metals prices hold relatively steady, the current sell-off is likely to be limited

The significant rally in $US over the past 3 days is leading to a test of resistance which, if broken may imply further upside. This possibility has taken its toll on gold which fell last night and will put pressure on gold miners this morning.

The Aussie Dollar goes into this mornings’ wage price index following overnight selling momentum. This could see it under further pressure if wages grows more than expected following the surprisingly weak third quarter data.