Article / 12 February 2015 at 8:02 GMT

Morning Markets: WTI into sub-$50/b territory again

Former managing editor, TradingFloor.com / Saxo Bank
Denmark

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Your watchlist

  • Swedish repo rate announcement (0830 GMT)
  • EU Industrial Production (1000 GMT)
  • UK: Bank of England Inflation Report (1030 GMT)
  • US: Retail Sales (1330 GMT)
  • US Manufacturing & Trade: Inventories and Sales (1500 GMT)
  • US EIA Weekly Natural Gas Storage Report (1530 GMT)

The active futures contract in WTI crude oil trades below $50/barrel once again after the US Energy Information Administration reported inventories at around 80-year highs yesterday afternoon. EUR/USD trades at 1.1314 at the time of writing after the Eurogroup extraordinary meeting yesterday proved a constructive one albeit without any conclusion regarding an extension to the bailout programme for Greece. No joint statement was released after objections to such a procedure from Greek delegates. After all-night discussions in Minsk regarding the situation in Eastern Europe an agreement is expected to be reached regarding a cease-fire that will take place within the next 48 hours. Confirmation of this should hit the press soon. 

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Market signals

Asian session

  • The Nikkei 225, Topix and Hang Seng indices have all made gains in Asian trading.

  • USD/JPY hit highs of 120.47 as market talk of US base interest rate hikes mid-2015 grows

  • The employment change figure in Australia also disappointed with a reading of -12.2k.

  • AUD/USD moved to lows of 0.7644 and sits just above there now

  • Kiwi also suffered overnight with  a low of 0.7332 the low after very poor PMI print

Forex ahead

  •  EUR/SEK trades at 9.4765 ahead of Swedish data and events

  • USD/SEK and NOK/SEK trade at 8.3765 and 1.0938 respectively

  •  EUR/USD risk reversals proved popular during London and NY trading yesterday with 600 million per leg of a one-month 10-delta structure going through the inter-dealer brokers at a differential of 3.0 favouring the downside.
    • EUR/USD volatility in general is firm with the one month straddle kicking off at 12.35 and the same instrument in USD/CHF opening at 11.7.
    • Overnight Cable options have a volatility of approx. 14.0 ahead of the inflation report today. Overnight EUR/USD has just traded with a volatility of 15.5.
    • Currency option retail flow within Saxo Bank shows a bias in favour of long put and/or short call positioning of over 75% regarding USD/CHF, XAU/USD and XAG/USD.

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From the Floor

  • AUDUSD slammed. "It was the worst [jobs] reading since August 2002 and is a signal for more rate cuts," says Christoffer Moltke-Leth
  • Sterling key. "There is a bit of noise on the BoE being hawkish today and there could be some two-way risk with Carney today," says Hardy.

Get the latest from all of Saxo Bank's trading desks in From the Floor within the hour.
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In opinion

Veni, vidi...squib

They came, they saw, they did very little. Eurogroup Greek debt crisis meeting could not even deliver the mandatory post-statement. Juhani Huopainen gives his withering assessment.

Europe's up

While the Greek debt crisis bubbles away, The EU can at least hope for better news from an industrial production report that could add ballast to signs of mild growth. Jim Picerno elaborates

Under....and down

A pretty shocking jobs report has seen the Australian unemployment rate rise to 6.4% and the AUD on the backfoot against USD slipping to sub 76.50 in the aftermath, writes Max McKegg

Rallying cry

There could be an intraday move up for EURGBP and Alan Collins explains why he thinks this one could take the pair within touching distance of 0.7500.

Lifeblood

After yet another round of Ukraine peace talks – this time in the Belarus capital of Minsk – come to a conclusion, Nadia Kazakova explores the vital role of exports in Russia's economy

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Now who isn't partial to a lovely, fresh spoonful of black caviar? photo: istock

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-- Compiled by Martin O'Rourke

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