ASX 200

Once again weakness in the US carried through to Asia with stocks unable to hold any National-Team-inspired gains, but it was the contagion to commodities that was most notable (as a hike in exchange fees snuffed out a lot of speculative fervor)

• European equities have followed suit from their Asia-Pac counterparts to trade higher across the board
• Markets await Brexit headlines amid Barnier deadline
• Looking ahead, highlights include US weekly jobs and potential comments from ECB’s Draghi.

ASIA

A selloff which started in Asia, driven by renewed liquidation of Chinese and Hong Kong tech stocks and accelerated by weaker metal prices which pushed the Shanghai Composite below a key support and to 4 month lows...

One look at S&P futures this morning reveals an unchanged market, however it is again the violent sector rotation that is taking place behind the scenes that is the real story, with defensive sectors real estate, retail, food, utilities outperforming while investors continue to bail and book profits on tech stocks after sharp gains since the start of the year.

The dollar jumped the most in two weeks, pushing Treasury yields as much as 6bps higher (before easing back) with US equity indexes primed for a another record-setting day after Senate Republicans approved a reduction in the corporate tax rate as part of a sweeping overhaul, giving a boost to President Donald Trump’s stimulus plans. The key market catalyst was the US Senate passing the tax reform bill through a vote of 51 vs 49 just before 2am on Saturday morning.

Markets were thrown for a loop in the past 24 hours, with the Dow first soaring nearly 400 points on Thursday on expectations that tax reform was a done deal, when drama emerged just after the close when the Senate tax bill came this close to falling apart when the proposed "Trigger" was ruled as invalid, pushing a Thursday tax vote to this morning, and as of this moment the bill appears in limbo with the GOP scrambling to find ways to appease the sudden loud opposition among budget hawks. UBS economist Paul Donovan summarized it best this morning: