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Playlist: Bonds

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37:16
Bonds update webinar: Stress in the credit space
Althea Spinozzi
31 August 2018 at 6:19 GMT
48:21
Bonds update webinar: Topics to monitor — #SaxoStrats
Althea Spinozzi
26 July 2018 at 9:56 GMT
2:42
The week ahead in macro — #SaxoStrats
Kay Van-Petersen
09 July 2018 at 9:43 GMT
51:57
Bonds update webinar: Trade wars and political instability
Althea Spinozzi
28 June 2018 at 8:22 GMT
8:35
From the Floor: Fed meeting 'painful for EM'
#SaxoStrats
14 June 2018 at 7:17 GMT
2:51
Shorting precious metals into Fed hike — #SaxoStrats
Kay Van-Petersen
04 June 2018 at 10:13 GMT
Video / 25 May 2018 at 8:28 GMT

From the Floor: 'A very odd set of market circumstances'

#SaxoStrats
White House
White House, black clouds: Trump's cancellation of the North Korea summit has sparked market unrest. Photo: Shutterstock

The last trading day of the week kicks off with an unsettling "very odd set of market circumstances," says John J Hardy, Saxo’s Head of Forex Strategy. For one thing the status of the recent big climb by US yields is very much in question, and remember that this rise is being cited as a major driver of the US dollar rally. 

But that rally itself remains intact although a more vigorous Japanese yen rally has now emerged, taking some of the steam out of the dollar focus. "There's just something odd about the whole backdrop across markets. The S&P looks eerily quiet – it hasn't gone higher but it hasn't fallen lower – and some of the other risk measures don't look very healthy," Hardy says. "Something is flashing red lights for me across markets and I would ask that traders be respectful of that," he concludes.

In commodities, the big theme is the likelihood of increased output, says Ole Hansen, Saxo’s Head of Commodity Strategy. "The speculation that has been rife this week about Opec and Russia easing their supply cuts was more or less confirmed yesterday by the Russians." The pair will get into the details of this at their meeting on June 23, the trigger for the move being the Venezuelan production collapse which has resulted in over-compliance with the output cut targets. 

Still, this hasn't yet knocked oil out of its range as the unquantifiable supply risk from Iran has kept the market in a relatively tight range this week with sellers emerging above $80 on Brent and $72 on WTI, Hansen says. But there is the risk of a correction nonetheless which would see  WTI focusing on $70.25/b (20 DMA) and $67.20/b, and Brent on $77.4 followed by $75.50/b (38.2% and 61.8% of April run up) .

Gold, meanwhile, trades back above $1300/oz with the combined geopolitical ills of Trump's war of words with North Korea, Turkey's messy election and failing economy as well as the existential threat to the European Union from Italy's new populist regime, all making the yellow metal bask in a safe-have glow.

Finally today, periphery bonds are suffering a bout of weakness sparked by unsettled politics in Spain where the main opposition party is threatening a no-confidence vote in the centre-right prime minister, reports Althea Spinozzi, from Saxo’s bond trading desk.

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