Themes

· General mood is “risk off”

· U.S. Housing Starts (1.72mln) and Building Permits (1.82mln) close to expectations

· U.S. Retailer Target missed on earnings noting rising costs

What’s Moving

It’s rare to see an individual stock move related markets, but that’s what happened overnight. After quiet trading in Europe, New York trade opened to the earnings report from Retailer Target. Target managed to grow revenue, but earnings were horrible, with the company noting rising costs.

This saw U.S. equities get hit hard, while currency players took note of the comments about rising costs and input those into their U.S. inflation calculations.

This promoted a massive flight to safety bid, with strong buying seen in the Yen and big selling out of Dollars and commodity currencies.

Thoughts

Should be another session of consolidation in Asia today after the wild overnight swings. There is some key data on the calendar today though, which includes:

· Japanese Core Machinery Orders (E: 3.9%)

· Australian Employment Change (E: +30k)