Show less
Morning Call: Softer dollar boosts commodities, stocks
21 September 2018 at 7:40 GMT
Morning Call: Markets stabilise as trade tensions ease
20 September 2018 at 8:28 GMT
Morning Call: Chinese shares surge as trade war rages on
19 September 2018 at 8:36 GMT
Today’s FX chart analysis - video
John J Hardy
18 September 2018 at 10:28 GMT
Morning Call: Trump hits China with tariff plan
18 September 2018 at 7:29 GMT
The week ahead in macro
Kay Van-Petersen
17 September 2018 at 8:11 GMT
Macro Monday week 38: Keep Global Macro and Carry On
Kay Van-Petersen
17 September 2018 at 8:02 GMT
Morning Call: US yield curve lifts, boosting dollar
17 September 2018 at 7:23 GMT
Technical analysis webinar – A view of the market: Larsson
Kim Cramer Larsson
12 September 2018 at 14:44 GMT
Morning Call: Chinese shares fall further
11 September 2018 at 8:36 GMT
Morning Call: USD, SEK in focus
10 September 2018 at 7:49 GMT
The week ahead in macro
Kay Van-Petersen
10 September 2018 at 7:37 GMT
Morning Call: Is Japan next?
07 September 2018 at 7:35 GMT
Video / 27 February 2017 at 8:16 GMT

From the Floor: Awaiting Trump's tax plan — #SaxoStrats

• Trump talking to Congress tomorrow very important for markets — Hardy
• Border adjustment tax would be dollar-positive, in short term at least — Hardy 
• USDJPY probably most sensitive to Tuesday’s Trump speech — Hardy 
• Gold supported by political risks and lower real yields — Hansen
• Oil had its tightest trading range (4-wk rolling av.) since January 2004 — Hansen
• US inflation data (PCE) out Wednesday another important event  — Hansen 
• Fed rate hike seen for May or June unless Yellen gets very aggressive — Boye
• Italian auctions today and tomorrow main European fixed-income event — Boye

By Clemens Bomsdorf

Oscars were handed out tonight with some disruption taking place as the best film initially and falsely was announced to be La La Land, but then it was Moonlight. Having left Hollywood's biggest annual event behind, it is US president Donald Trump that is to dominate the news once again, entering centre stage tomorrow to address Congress (have also a look at our Morning Markets for this).

Markets have raised doubts about his tax reform and infrastructure spending, Hong Wei Lee from Saxo's Asia desk reports. Gold and yen are steady in Asia as markets remain cautious. Stocks are all in red, with Japanese shares suffering in particular. Lee also notes that Chinese authorities might scrutinise speculation in commodity futures – particularly iron ore and steel futures, both of which have rallied. Doing so has the potential to have quite an impact on prices as we saw last spring.

USDJPY could react strongly to Trump's Tuesday speech 
Source: Saxo Bank
John J Hardy, head of FX strategy at Saxo Bank, says that markets ahead of tomorrow's Congress event are pricing for the possibility of significant tax reform. However, “There are low expectations concerning the border adjustment tax, which is most USD positive of the proposed measures,” says Hardy, stressing that even if the longer term effect might be negative on the dollar, it will not be in short term since the market has not priced this in. 

USDJPY will be in focus as it is probably most sensitive to Tuesday’s Trump speech. “I think it will be significantly higher or lower over the next week,” says Hardy, adding that short term options should be considered, which he says appear cheap at the moment. Besides the Trump speech, the US PCE inflation out on Wednesday also warrants watching closely. 
GBP starts this week very weak due to a potential new Scottish independence referendum, says Hardy. “It is looking pretty rocky for sterling if its below 1.2350 and it is gonna be a long time until we get clarity on Brexit.”

Gold has still potential
Source: Bloomberg
The influence of the PCE inflation data and Trump speech will also be felt on the precious metals market, says Ole Hansen, Saxo's head of commodity strategy. Last week gold broke above $1,250/oz, indicating some profit taking may take place ahead of tomorrow’s speech. Hansen sticks to $1,278/oz as target. Gold has now recovered 50% of the selloff, but net long only recovered by 20%. Hence, if the market continues higher there will still be some catch-up buying to do for funds.  

Oil traded a bit higher this morning. Funds are still piling into oil while it had had its tightest trading range (4-wk rolling av.) since January 2004. Hansen’s bias is towards being short on oil with a focus on a retest of CLc1 support at $52.70/barrel.

Copper is drifting a bit again today, struggling to find support despite supply disruption. Sugar dropped below $0.20/lb as the Indian government has banned imports in an attempt to support its domestic producers.

fixed income
In fixed income, German Bunds continue to be very very strong, says Saxo's fixed income trader Michael Boye , underlining that they remain above the 166 mark. “It seems there is lot of systemic risk priced in. Some are even talking even about a re-denomination risk linked to a Eurozone breakup," notes Boye, adding that the risk of this is very low. 

Peripheries were quite a bit stronger. Italian auctions today and tomorrow will be the center of attention in Europe, says Boye. About €7 billion in Italian bonds is coming onto the market. In the US, besides Trump's, Janet Yellen's speech on Friday is the week's most important. Since a March rate hike seems to be priced out, we need to hear something aggressive from her to believe in it again. May or June is now looking more likely.

Italian auctions are in focus in European fixed income markets. Photo: Shutterstock 

Clemens Bomsdorf is consulting editor at

Editor’s note: From the Floor takes advantage of's unique real-time access to Saxo Bank’s various trading desks around the globe to put our community in touch with the developments that matter to their portfolios 


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail