A positive European session gave way to US concerns in overnight trading. The formal announcement of the EU’s support package lifted the Euro and stocks. However doubts around the timing of the next US fiscal measures, and concerns about possible underreporting of US Covid cases, soured sentiment.

Investor reactions drove an increase in volatility across asset classes. EUR/USD cracked important resistance and traded above US $1.15. Gold soared to new 11 year highs, and cryptocurrencies broke out of their recent funk. The US dollar slide resumed, with the Dollar index cracking key support at 96.00. Rising crude oil and iron prices saw the Norwegian krone and Australian dollar add to recent gains.

US tech stocks came under pressure and the Nasdaq closed lower, in contrast to gains for the SPX and Dow Jones indices. Asia Pacific share futures appeared to respond to the tech weakness. Opening losses are on the cards for Japan, Hong Kong, Singapore and Australia.

The weakness in stocks defied a solid night of US company reports. Coca Cola, Comerica, Phillip Morris and Texas Instruments all reported above consensus estimates. Just 12% of US SPX 500 companies have face shareholders so far, but pressure on earnings is evident. The oil and gas (-86%) and financial (-34%) sectors are hardest hit.

Impending data includes Japanese PMIs and Australian retail sales this morning, and Canadian CPI tonight. Crude oil traders are looking to the Energy Information Administration weekly inventory numbers tonight. Analysts’ median estimate is for a draw of 2.2 million barrels.

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