Asia Pacific investors are caught in a cross current. Data released overnight disappointed in Europe but beat expectation in the US. Continental exchanges dropped, while US indices finished in the green, aided by FOMC minutes that were widely read as dovish. The numbers drove a further decline in EUR/USD.

French and German PMIs missed on almost every count. These forward looking indicators remain in expansion territory, albeit at a slower rate than investors expected. A miss on UK inflation data further coloured the lower growth scenario. The Euro Stoxx 50 index dropped 1.27% in response. The reads raised fears tonight’s German GDP and UK retail sales could also disappoint.

In contrast US services and manufacturing expanded at better than forecast levels. After opening weakness the news saw initial declines contained. Minutes of the most recent Fed Open Market Committee meeting provided a catalyst for a late rally.

Industrial commodities came under pressure. Oil prices slipped as US inventories jumped, and copper also fell. Asia Pacific futures are pointing to a negative day. A lack of regional data today may see share markets tread water. Weakness in both the US dollar and Euro could see strengthening local currencies add to the weight on shares.

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