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 / 02 August 2017 at 7:47 GMT

From the Floor: Tension mounts over BoE rate guidance — #SaxoStrats

  • • Tension rising over potential Bank of England rate hike guidance on Thursday
  • • Apple Q3 earnings roughly in line with estimates; company lifts revenue guidance
  • • Apple shares jump 7% in afterhours trading on revenue guidance upgrade
  • • USD broadly weak, despite a 'bit of a bump against the yen'
  • • Commodities, including oil, weaken
  • • German 10-year yield drops below 0.50%, US treasuries in tight range
  • • Venezuelan bonds dive deeply on political turmoil

SaxoStrats banner
By John Acher

Tension is mounting in the financial markets over the chances that the Bank of England could flag an interest-rate hike on Thursday, and the reaction could be severe in either direction as the markets remain divided over the likely outcome, says Saxo Bank's FX strategy chief John J Hardy.

"[There’s] a lot of tension over whether they are poised to hike rates after some pretty split votes recently," says Hardy. 

That creates a two-way set-up for volatility, where dovishness from the BoE would disappoint many market participants, while clear guidance for a hike has the potential to spark a knock-on rally, Hardy says. 

Meanwhile, the US dollar remains "very weak broadly" despite "a bit of a bump against the yen," he says.

Shares in US technology darling Apple leapt more than 7% in afterhours trading on Tuesday and the company sparked a wider tech rally by delivering solid third-quarter results and lifting its guidance for fourth-quarter revenue.

Apple chief executive Tim Cook also generated enthusiasm by discussing Apple's intentions to dive further into the autonomous systems business, says Saxo Bank's equities strategy chief Peter Garnry.

"The technology sector was really gaining on the back of Apple earnings,” he says.

But the main driver was Apple's upgraded outlook for fourth-quarter revenue to a range of $49-52 billion against the market's expectation of $49.1 billion: "That is really what is bolstering technology sentiment here."

Commodities remained soft, with oil prices dented again by the American Petroleum Institute's weekly data on Tuesday showing a further build-up in US oil inventories.

In the fixed-income markets, core European yields fell, with the 10-year bund yield ducking below 0.5% to its lowest level since early July in slow summer trading. 

 German 10-year yield falls below 50 basis points
German 10-year yield
US Treasury yields remained in a tight range — 2.25-2.35% for the 10-year — on unpredictable US politics and persistent worries about a conflict with North Korea.

Venezuelan bonds have plunged after president Nicolas Maduro at the weekend carried out a controversial and disputed vote to further consolidate power, throwing the South American oil-exporting country into turmoil and raising the prospect of a sovereign default, says Saxo Bank's fixed-income trader Michael Boye.

Venezuela's 2017 bond, which matures in just a few months, is trading at 70 cents on the dollar, Boye says.

"If they pay this one back at 100, you are looking at more than 50% absolute return, so that tells you want kind of distrust the market has right now towards Venezuela," Boye says.

Bank of England
 The Bank of England's policymakers meet on Thursday.

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