Playlist: RBOB Gasoline - Sep 2019

Show less
From the Floor: 'No relief for the UK' — #SaxoStrats
24 August 2017 at 7:45 GMT
What do gasoline prices say about the oil trade?
Futures Institute
27 September 2016 at 8:21 GMT
Why oil has rallied to new 2016 highs: Hansen
Ole Hansen
27 April 2016 at 9:17 GMT
Hansen: Are we driving to new crude lows?
Ole Hansen
06 August 2015 at 10:15 GMT
Video / 29 August 2017 at 8:28 GMT

From the Floor: Escalation of N.Korea fears sparks flight to safety

  • • North Korea ratchets up geopolitical tension by test firing missile over Japan
  • • N.Korean missile launch sparked flight to safety, including into gold, JPY, CHF
  • Damage estimates for tropical storm Harvey climb to $100 billion
  • • Gold finally took out resistance, upside focus now: $1,337 and $1,375/oz
  • • Oil lower on US demand drop, but cushioned by Libyan supply disruptions
  • • Gasoline remains bid as market tries the gauge impact of Harvey

Saxo Strats banner
By John Acher

North Korea test launched a ballistic missile over Japan's northern Hokkaido island into the sea early on Tuesday, prompting a stern warning from Japan and driving investors into perceived safe-haven assets, including the Japanese yen, gold and the Swiss franc.

The new North Korea missile launch stole the spotlight from the emergency efforts to cope with the flooding in Texas caused by tropical storm Harvey.

"This is obviously seen as a massive step up in terms of the degree of provocation," says Saxo Bank's head of FX strategy John J Hardy. "It was fired over land, which is a bigger deal than usual. "

"The key will be what Trump says when he wakes up," Hardy adds. "It’s a remarkable situation, and we all need to be careful here."

The heightened tensions fueled gains in the JPY, with USDJPY diving to "new local lows."

"Those did not hold overnight. For those to hold we would need to see this North Korea situation feeding into a general risk-off move,” Hardy says.

USDJPY plumbs new local lows as JPY gains on heightened geopolitical worries
Source:  Saxo Bank

Estimates of the damage from Harvey, which has caused catastrophic flooding in Texas, are reaching as high as $100 billion, and could affect the US debt ceiling debate, says Hardy.

Amid the worries about Harvey, the weaker US dollar, US president Donald Trump's political woes in Washington, a drop in real US yields on a dovish message at the end of last week from Fed chief Janet Yellen, and continued demand for safe-haven diversification, gold broke through key resistance at $1,300/oz on Monday, says Saxo's commodities strategy chief Ole Hansen.

"We can say that gold finally did take out resistance yesterday," Hansen says. "One of gold’s best friends this year has been Trump – his tweets and unpredictability."

The next initial target for gold is $1,337 and then $1,375/oz, while to the downside $1,295/oz needs to be support for any setbacks in the market, Hansen says.

The price impact of the drop in crude oil demand from refineries caused by hurricane Harvey is offset by supply disruptions, including in Libya, which are supporting oil prices.

"The market is probably not going to sell off in any major way as long as it is trying to gauge the impact [of Harvey and the Libyan disruptions]," says Hansen.

The S&P 500 index is still in a bearish trend on the charts, and Tesla's share price "is drawing some interesting triangle patterns," says Saxo Bank technical analyst Kim Cramer Larsson.

Oil storage tanks
 Oil storage facility. The price impact of lower crude oil demand from the shutdowns of US refineries is being offset by supply disruptions in Libya. Photo: Shutterstock

John Acher is a consulting editor at TradingFloor


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