Today will bring some clarification about whether yesterday's moves in bond and stock markets will continue the same way. When it comes to data there is not much on the agenda that potentially could influence markets strongly.
Article / 15 July 2016 at 8:40 GMT

From the Floor: Markets steady after France attack

Your Next Trade
  • Very, very minor effect of terrorism on govt bonds – Boye
  • An unsustainable explosion of new credit in China – Hardy
  • US heatwave drives cotton 12.6% higher – Hansen
  • Industrial metals boosted by Chinese data– Hansen
  • S&P500 is trading at 17 times expected earnings – Garnry
By Clare MacCarthy

France has extended a national state of emergency and is mourning her dead after last night's terrorist atrocity in Nice while elsewhere in Europe life continues as normal. Saxo Bank's strategists, speaking on their regular morning conference call, report that markets are largely unaffected by the attack. "We've seen a very, very minor reaction at the opening in government bonds," says Michael Boye of the fixed income trading team. Equities in Europe are narrowly mixed following strong performances in Wall Street and across Asia and airline stocks are predictably lower in response to the terrorist strike.

John J Hardy, Saxo's head of FX strategy, notes that while the economic data that was reported overnight in China revealed a buoyant 6.7% year-on-year economic growth that they also show that this advance is due to "an unsustainable explosion of new credit that puts further pressure on the currrency". The New Zealand dollar crumbled further overnight after the Reserve Bank of New Zealand announced it would release an economic assessment on July 21 just a few days after the Q2 CPI release. "I think we're seeing some trend changes in Kiwi dollar and Aussie dollar," Hardy says, adding that the focus from here is on risk appetite.

US stocks continue their dizzy ascent:
The S&P 500 continued climbing into virgin territory overnight but this dizzying ascent will likely soon grind to a halt. "We're leaning towards a negative view on this index given that it's trading at 17 times expected earnings," says Peter Garnry, head of equity strategy. As illustrated by the chart above, expectations for earnings 12 months ahead are on the rise but in the absence of supportive macro data the upcoming earnings season is likely to disappoint, Garnry forecasts.

In commodities, meanwhile, Ole Hansen, head of commodity strategy, reports that it's been a particularly good week for softs and that cotton was driven 12.6% higher by a heatwave in the USA that threaten's this year's crop. "Coffee continues to be supported by a truckers' strike in Colombia and some of the industrial metals have been boosted by improvements to the Chinese economy," he adds.

Oil, on the other hand, remains exposed to further weakness with a renewed focus on the supply glut in crude. WTI is bouncing off support at $44.50 and in the short term risk is skewed to the downside. Gold is continuing to find support at $1,328 but the risk remains of an extension to key support between $1,313 and $1,298, Hansen says.

Finally, the hottest stock on the block overnight was the messaging app Line which made its debut in Tokyo after a book building process that saw heavy demand. The stock closed 37% higher in Tokyo having been as high as 52% above the opening price in a stunning display of strength and optimism. Go message that!
 Shares of messaging app Line soared 50% after their Tokyo debut. Photo: iStock


Clare MacCarthy is deputy editor at

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