Across Asia, regional markets are all convincingly lower ahead of tonight's FOMC meeting and news that China's import growth had slowed more than expected.? The Shanghai Composite is the region's worst performer, lower by 1.9% while the Hang Seng is also seeing losses of more than 1%.? Elsewhere, the Nikkei 225 and the Kospi are seeing more muted declines of 0.6% and 0.5% respectively.

In Australia, the ASX 200 closed down 1.2% at 4540 and right near its lows of the session.? Losses for the day were broad based but were felt the most across the materials, healthcare, telecoms and financial sectors.? Downside momentum intensified after the release of Chinese data showing a much larger-than-expected trade surplus for July but a sharp slowing in import growth.

As always it's difficult to interpret the Chinese data.? A burgeoning trade surplus could be seen as adding to China's financial strength and providing it additional policy flexibility while a sharp fall in import growth could raise concerns about China's ongoing external requirements.? Given the market's natural bias to see the glass as half empty, the latter scenario seems to be the prevailing way of thinking.?

This explains why our miners may have taken another leg down since the release of the data.? Slowing internal demand means less demand for commodities and therefore lower prices, or so the thinking goes.? However, when you stand back and think about it, 22% import growth is nothing to sneeze about!

That said, as is the case with nearly all Chinese data, the market's first reaction is not always the right one so it would not be at all surprising for this data to be viewed in a different light in a few days.? It's all part of the fun in this "too hot, too cold" economy.

Yesterday's star performer, the materials sector, was the weakest of the major sectors today closing lower by 1.6%.? Despite broadly higher base metal prices overnight and a generally optimistic outlook for the sector for the remainder of the year, investors seemed happy to book some profits ahead of any market moving comments from the Fed tonight.? Many market participants still seem very happy to be caught on the sidelines as opposed to being caught with their pants down!?

Among the heavyweights, BHP Billiton and Rio Tinto were weaker by 2% and 1.9% respectively while Orica and BlueScope were all lower between 0.7% and 2.5%.? Alumina closed lower posting an interim profit of US$22.2m which was below even the most pessimistic of forecasts (some things just don't make sense!)

Financials also proved a major drag today with the sector down 1.2%.? All four of the major banks were down between 0.5% and 2.2% with NAB being the worst performer after a disappointing trading update that revealed lower than expected Q3 cash earnings and flat net interest margins.? Elsewhere in the sector, Macquarie Group was lower by 1.8% while Suncorp-Metway and Axa Asia Pacific were higher between 0.7% and 1.3%.

The consumer discretionary sector was also 0.6% lower and under pressure courtesy of weakness among gaming and betting stocks. Tabcorp Holdings, Aristocrat Leisure and Tatts Group were all weaker between 0.3% and 4.2%, while the discretionary retailers were mostly firmer with the likes of Harvey Norman, JB Hi-Fi, and Myer all seeing gains of between 0.3% and 1.7%.

Essentially, while the materials, financial and consumer discretionary sectors were the biggest losers on the session to date, nearly all sectors were modestly lower and seemingly treading water ahead of further rhetoric from the Fed tonight.

In the economic news of the day, the NAB Business Confidence survey showed that business confidence dropped 2 points in July from June, with the business conditions index also falling 3 points over the month with uncertainty surrounding the upcoming election result clearly weighing on sentiment.