Markets with more a risk off feel - ANZ

Analysts at ANZ explained that markets had a more risk-off feel overnight led by equities and commodity prices. European equities moved 0.9-1.1% lower following a softer Asian session. 

Key Quotes:

"US bourses are currently down 1.0-1.4%. A combination of profit taking into month end, higher bond yields, stretched valuations and potential US health-care shake-up seemed the main drivers. 

Commodity prices fell too, with oil prices down 1.8%, which weighed on energy stocks. Concern that US oil inventories may be rising weighed. 

Bond yields were mixed. In the US they retained their upward bias, with the 10-year yield consolidating above 2.71%. 

European bonds were encouraged by the dip in German inflation (1.4% vs 1.6%), which hints at a soft bias to the euro area print tonight. The yield on the 10-year bund eased 1 bps to 0.68%, but remained near its highs. 

The strength in euro area GDP data is the focus for the market, with any dip in headline HICP inflation expected to prove transitory for now. Euro area growth rose 2.7% y/y in Q4 following Q3’s 2.8% rise – the strongest growth performance in a decade."