Asia Pacific shares will open under pressure today after share market sentiment reversed to negative during the US session overnight. Gains on European bourses and in industrial commodities initially pushed the S&P 500 index higher, but despite an expansion in consumer credit and labour market conditions, sellers quickly took control and forced the major indices into the red. Most measures were down around 1% before weaker job opening and mortgage application reports were released, snuffing out any last minute rally and ensuring US stocks finished on their lows.
Futures markets for the Australian index capitulated, shedding almost 100 points before closing down 82 for the night session. This may overestimate the potential for falls today. Bank stocks are likely to hold the key in light of their market leading 3% gains yesterday. If the international support for the sector re-appears today losses will be moderated. This is a reasonable expectation in light of the lower levels of AUD this morning.
Macro data will attract investor attention. The Australian jobs report for August is expected to show a gain of 5,000 jobs and an unemployment rate of 6.2%, as the participation rate pulls back from July’s spike to 65.1%. Inflation data in China may shift sentiment by shedding light on growth pressures, and Japan will be a focus as office vacancies, investment flows and PPI numbers drop.