Video

Playlist

Show less
1:33
Why I’m buying Brent: Lambert
Clive Lambert - FuturesTechs
Yesterday at 8:33 GMT
1:22
Quarterly Outlook: Gold bulls gathering strength
Ole Hansen
Thursday at 15:19 GMT
1:30
Quarterly Outlook: Will cryptomania continue?
#SaxoStrats
Thursday at 14:21 GMT
1:51
Quarterly Outlook: 'Q1 is a time to be cautious'
Simon Fasdal
Thursday at 13:33 GMT
1:06
Quarterly Outlook: Housing bubbles everywhere
Dembik Christopher
Thursday at 12:58 GMT
3:15
Quarterly Outlook: Currencies eye a bubbly 2018
John J Hardy
Thursday at 12:16 GMT
5:51
Why I'm buying gold: O'Hare
Steve O'Hare - First 4 Trading
Thursday at 10:17 GMT
42:44
Technical analysis – A view of the market: Larsson
Kim Cramer Larsson
Thursday at 9:49 GMT
1:80:13
FX Options webinar: the year ahead
Dan Larsen
Wednesday at 8:40 GMT
Video / 22 September 2017 at 7:33 GMT

From the Floor: Dollar rally fails to hold — #SaxoStrats

#SaxoStrats

   • News of a new NK nuclear test sparks risk-off move
   • Equity futures, yields head lower as gold finds strong support
   • UK PM May's Brexit speech in focus with cable solid above 1.35
   • 'No easy coalition' in view for Germany, National Party set to win in NZ
   • Apple shares could head down to $142 if 100-day MA fails to hold

#SaxoStrats
By Michael McKenna

The Federal Open Market Committee may have come out as hawkish as the present data allow on Wednesday, but the subsequent rally in the US dollar has failed to find much purchase against the major pairs.

"This leaves us tactically confused," says Saxo Bank head of forex strategy John J Hardy, adding that the concurrent dump in the Australian dollar has seen AUDNZD heading sharply lower ahead of New Zealand's Saturday election where the National Party appears set for a win.

On Sunday, Germany heads to the polls, and while a Merkel victory is all but a foregone conclusion, the latest data indicate that the government in Berlin could shift rather dramatically in form as the economically liberal FPD and right-wing AfD parties prepare to enter the Bundestag for the first time.

After US president Donald Trump's dramatic introduction of far-reaching sanctions against any firm doing business with North Korea, the isolated communist state has announced the probable test of a hydrogen bomb in the Pacific with markets reacting sharply to the news.

Equity futures are down, core yields are under pressure, and gold is finding support from this outbreak of geopolitical risk.

XAUUSD
XAUUSD

Create your own charts with SaxoTraderGO click here to learn more

Source: Saxo Bank 

"The news has placed gold at a critical level," says Saxo Bank head of commodity strategy Ole Hansen. Singapore-based Saxo trader Tareck Horchani adds that the yellow metal gained $7/oz overnight to $1,287/oz after the news of North Korea's H-bomb threat.

Beyond gold, Hansen reports that Brent crude appears likely to run out of steam ahead of the $57.50/barrel level, while WTI is struggling to find buyers above $50.50 as Opec and its non-Opec partners meet in Vienna to discuss their production cut deal, which is widely expected to be extended.

At present, Hansen says "no action is needed" as strong refinery demand and a wide WTI premium are both supportive of non-US suppliers.

In stocks today, Saxo Bank head of equity strategy Peter Garnry says the stronger euro will weigh on the German Dax index, noting that he expects the recent rally to be tested to the downside. 

Stateside, Garnry says that Apple shares are under pressure after a broadly underwhelming series of product launches; "shares closed Thursday at their 100-day moving average, and we expect this level to be attacked again".

If Apple stocks break their 100-day MA, Garnry concludes, a move down to $142-3/share appears probable.

Finally, UK prime minister Theresa May will talk Brexit in Florence today, with markets expecting a broad array of concessions to the European Union on citizens' rights and some clarification on the "divorce bill" to be paid by London upon its departure from the union.

"Cable appears solid above 1.35," says Hardy, "but any surprises in Florence [could move the needle on sterling]".

For more on North Korea, today's data calendar (featuring a Eurozone PMI release), the upcoming suite of central banker outings, and crude oil fundamentals, listen to our Morning Call in full.

Firenze
Medieval Florentine architects probably had an easier time spanning the Arno than Theresa May 
will have bridging the gap between the UK and the EU. Photo: Shutterstock.

Michael McKenna is senior editor at Saxo Bank

Relevant articles for you

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com 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 Tradingfloor.com 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 Tradingfloor.com 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 Tradingfloor.com or as a result of the use of the Tradingfloor.com. 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 Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com 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
- 沪ICP备13028953号-1

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