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 / 30 August 2017 at 7:20 GMT

From the Floor: Gasoline, oil diverge on Harvey's impact — #SaxoStrats

   • JPY dumps again as risk sentiment rebounds
   • Trump response to latest North Korean threats muted
   • Downside break of 1.1910 in EURUSD could place 1.17 in view
   • Gasoline and crude prices diverge as Harvey heads east
   • Core bonds close to year-to-date record

By Michael McKenna

Hurricane Harvey has already knocked out 25% of the US' entire refining capacity with production down to 4.1 million barrels/day, says Saxo Bank head of commodity strategy Ole Hansen. 

Although the full scope of the potential damage has yet to be worked out, he adds, the fact that the storm is presently headed east towards the refining strongholds of Beaumont and Port Arthur, Texas, means that the event risk is far from over for the US energy sector.

"We are seeing a divergence between gasoline and crude oil prices as the former spikes on supply cuts and the latter tumbles on a lack of demand," reports Hansen. 

"At this point, the market is driven by fear".

The massive disruption means that today's inventories data – as well as the releases slated for the coming weeks – from the Energy Administration are not likely to have a significant impact on markets, Hansen says.

Beyond oil and gasoline, today's forex, fixed income, and equities markets are all feeling the effects of a risk-on surge in place despite a renewed bout of sabre-rattling from North Korea over the US territory of Guam.

One reason for the market's casual treatment of Pyongyang's threats may be the response of US president Donald Trump, which Saxo Bank head of forex strategy John J Hardy describes as "muted and diplomatic".

With the USD gaining ground and financial markets apparently sanguine, Hardy reports that "what we see unfolding [in major USD pairs] might be significant". Overnight, he reports, the JPY dumped again while EURUSD eyes support at 1.1910 as traders deleverage.

"A downside break of 1.1910 could place 1.17 and even 1.16 or 1.15 in view," says Hardy.

Today's report from the Bank of England at 0945 GMT, along with German inflation data at 1200, could see a pronounced reaction in EURGBP if the data continue support a euro backslide.

Create your own charts with SaxoTraderGO click here to learn more
Source: Saxo Bank 

The risk sentiment rally sees gold on the defensive with the precious metal now mainly supported be geopolitical risks as stocks, bonds, and the dollar all point to a flight from safe havens.

According to Saxo Bank head of commodity strategy Ole Hansen, XAUUSD resistance currently sits at $1,337/oz with support at $1,295 and $1,277/oz.

Geopolitical fears may be muted into today's session, but global instability continues to be supportive ob core bonds which are close to their year-to-date record levels, says Saxo Bank head of fixed income strategy Simon Fasdal.

"This is impressive given macro data, central banks, and equities," adds Fasdal, noting that emerging market assets – both stocks and bonds – are continuing their bull run.

"It's unwise to rule out EM at this point," he reports.

While Berlin is set to release its latest inflation data at 1200 GMT, it is tomorrow's Eurozone and US inflation prints that are most crucial for the continuation of the current trends.

Beyond inflation, we have the US out with employment numbers at 1215 GMT and Canada reporting payroll figures at 1230 GMT.

Emergency vehicles fight flooding in Houston, Texas: Hurricane Harvey has already taken out a big chunk of the US' refining capacity and the storm is still raging. Photo: Shutterstock

Michael McKenna is senior editor at Saxo Bank


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