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 / 21 December 2017 at 8:19 GMT

From the Floor: Could Europe surprise in 2018? — #SaxoStrats

   • GOP tax bill passes, equities 'fail to convincingly extend gains': Garnry
   • US long yields a critical FX factor and the key driver of USDJPY: Hardy
   • Spanish housing data reveal strongest market in 10 years
   • Samsung shares decline as analysts move targets lower
   • SEK lower following Riksbank outing, no new QE from Stockholm

By Michael McKenna

European equities lagged their US counterparts throughout 2017, with both earnings and share prices failing to match the record-setting pace set across the Atlantic. In Saxo Bank head of equity strategy Peter Garnry's view, however, this could be set to change.

"European corporate earnings and releases were disappointing throughout 2017, and particularly in Q3, but I think we could see a turnaround into Q4," says Garnry.

According to Saxo's equities chief, credit is picking up, activity is on the rise, and valuations remain comparatively modest in Europe (at some 25% below US levels – all factors that could see EU shares pick up the pace into 2018.

"I really think Europe will push through," says Garnry, pointing to a new Spanish housing release that shows the strongest market in 10 years. "This isn't just a Spain story, it's a Europe story: confidence and credit access are picking up".

On the day, Garnry reports that markets failed to "convincingly extend gains" on the passing of the US tax reform bill, noting that the "only bright spot" overnight was the Chinese tech sector. 

In single shares, Garnry says that Samsung is 3% lower as analysts bet on the memory chip cycle peaking, but notes that Micron's massive Q1 earnings beat suggests that this may not be the case. "Our model is extremely positive on Samsung," says Saxo's equities head.

Samsung (hourly):

Create your own charts with SaxoTraderGO click here to learn more

Source: Saxo Bank 

The post-tax bill surge was just as elusive in the forex space as it was in equities, reports Saxo Bank head of FX strategy John J Hardy, who notes that "EURUSD is even at new local highs as the dollar reaction fizzles out".

"The key factor to watch in the FX (and USD) space right now are long US yields – USD bonds are currently under massive pressure [pushing yields higher] and this is the key driver for USDJPY," says Hardy.

Elsewhere in the FX space, Saxo's forex head says that the Swedish Riksbank outing yesterday saw no new QE measures announced with the central bank reporting that it will not consider hiking rates until well into 2018.

"We saw EURSEK head back into the middle of the range on post-Riksbank krona weakness," says Hardy, who adds that technical measures are set to temporarily swell the Riksbank's balance sheet over the coming months.

Finally, Hardy reports that USDHKD stands at cycle highs near 7.83 with no announcement from policy authorities that they will take any measures to counter the move; this pair could be one to watch in the short- to medium-term.

Hong Kong
HKD is nearing a two-year low. Photo: Shutterstock

Michael McKenna is senior editor at Saxo Bank 
Daniel CN Daniel CN
As a simple entrepreneur I counter that view. Whenever I meet colleagues, their view is "wow, we had a crazy wave up here businesswise but that will end". We have massive overcapacities, tech wise even simple producers are maxed out on robots, efficiency programs ... but on the other hand we have massive lack of trust in governments and investments are done afap. As far as possible away from EU. I just met a 14 man show in metals who spreads his wings as far as India just to escape "Merkels destruction of Europe". Id be really interested in a chart showing the big EU 10 and their investments in EU and out of EU.


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