Markets reversed their recent trajectory in overnight trading. Shares rose with copper and crude oil, and bonds sold off. More positive comments from President Trump on the trade negotiations and a larger than expected drawdown on crude oil inventories fuelled investor risk appetites.

Speaking in London, the US President said trade talks were “going well”, without offering detail. China’s Foreign Minister Wang Yi was more circumspect, answering “it depends” to a question on whether trade talks will reach an agreement this year. Beijing’s more restrained public commentary may explain yesterday’s outperformance by markets in Shanghai and Shenzen. Chinese investors where less enthusiastic on the prospects of a deal, and therefore had less to re-price when sentiment turned sour.

US traders focussed on a 4.5 million barrel draw on crude supplies, and oil jumped 4%. The broader implications are subdued by a more than 6 million barrel build in distillates and petrol.

Services PMIs in Asia, Europe and the US, delivered over the last twenty-four hours, also eased concerns. While the majority softened slightly, forecast beating reads in China and Germany featured, and most are in expansion territory.

Gold prices remain elevated, and the US dollar continued its tumble, suggesting not all traders are convinced.

Asia Pacific stock futures point to opening gains across the region of around 1%. Australian retail sales are due mid-morning. Forecasts of a 0.3% rise in October is the middle case, and a strong divergence either way could shape investor thinking given the significant role of consumers in the economy.

The Reserve Bank of New Zealand announces new capital requirements for banks today. Australian banks account for around 90% of NZ banking activity, and NZ contributes aro8und 15% of the big four’s profitability. Rumoured increase of a doubling of tier-one capital requirements would likely weigh on share price performances today

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