US investors piled back into shares overnight but currency markets indicate the re-shaping of global trade remains the key issue for markets. Bonds and gold fell as optimism grew. However futures markets show unmet selling interest in the US and a likely cautious response from Asia Pacific traders today.

The trade barrier retaliation between the US and China continues. The Mexican peso and the Canadian dollar both rose, reflecting a market perception that this stoush is all about China. Ahead of the US announcing tariffs on 1300 trade items China promised to match any further measures in “scale and intensity”. A response from China today could see any investor optimism vaporise.

While gold and bonds fell the rally in US shares was unconvincing. With less than two hours left in the session the S&P 500 index dipped into to negative territory before buyers pushed it to a closing high. The window dressing left local traders unimpressed, and indicated opening gains for regional shares are significantly smaller than the US rise.

Data has a hand in today’s action. The Caixin service PMI is expected to show an acceleration in expansion, and Australian retail sales a 0.3% bounce back in February after a weak January read at 0.1%. Santos shares remain a focus after Harbour Energy’s revised takeover bid, and Blue Sky Alternative investments will re-commence trading after responding to serious allegations from a short seller.