A 2018 high for the US dollar over the Euro dominated overnight action. Shares were steady and bond yields edged higher. Oil traders sold the fact of re-introduced sanctions against Iran. The Australian federal budget will draw headlines today but mild market responses are likely given the pre-announcement of many measures.

The US President announced a US withdrawal from the treaty that limits the Iranian nuclear program, and will re-institute sanctions. In a seemingly contradictory response oil markets fell 1% after a volatile trading session. Soothing words about replacing oil production and heavy pre-signalling of the move and an already elevated oil price may explain the surprising market moves. In contrast precious and base metals were steady in overnight trade.

Modest falls in Europe and flat finishes for US indices give little lead to Asia Pacific stocks. Japanese earnings data is expected to show a decline of around 0.5% in March. A beat on this data could reverse the current indication of an opening fall in Tokyo.

Australian index futures are bucking the negativity. The Federal budget announced last night is a potential modest support. A rational and politically feasible path to income tax rationalisation and further infrastructure spends are economically positive and could bring buyers to the share market. Adding to the potential for positive trading is an almost two year low in the Australian dollar against the US.