Video

#SaxoStrats
​The Trump administration has not yet formally deployed the long-awaited latest $200 billion in tariffs against China, but a new Wall Street Journal report indicates that Japan might be next on the agenda.
Article / 06 November 2014 at 8:48 GMT

From the floor: USDJPY hits brakes after 'tremendous' volatility

Former managing editor, TradingFloor.com / Saxo Bank
Denmark
Editor’s note: From the floor takes advantage of TradingFloor.com's unique real-time access to Saxo Bank’s various trading floors around the globe to put our community in touch with the developments that matter to their portfolios.

  • USDJPY volatility returns to "pre-Abenomics" levels
  • Pair rises to 115.50 before falling back to 114.05
  • Koefoed sees "fairly subdued" ECB meeting with Draghi urging caution
  • Alibaba's share price continues to rise ahead of Single's Day
  • Garnry issues warning on Amazon

By Martin O'Rourke

USDJPY

USDJPY is clearly where it is at today with volatility at "pre-Abenomics levels from a year ago", says FX desk's Jeppe Norup, leading to wild swings in the pair.

USDJPY hit 115.50 before the brakes were applied with a vengeance to force the pair back down to 114.05. "Everyone has been expecting this to trade higher," says FX desk's Pierre Magnussen speaking live from the floor in Copenhagen. "There is a support level at 112.40 and a line in the sand at 110."

"It is a major reversal in USDJPY," says Christoffer Moltke-Leth from Saxo's Singapore desk.

ECB

Today's European Central Bank is unlikely to offer anything new, says Saxo's head of macro strategy Mads Koefoed. "Mario Draghi will urge caution and patience," says Koefoed, adding quantitative easing might once again enter the forum during the press conference but that he "does not expect any details."

Equities

It is heating up in the equities markets especially as Alibaba continues to gather momentum with just five days to go to the biggest selling event of the year, China's Single's Day. The online giant's share price is stlll on the rise but Saxo Bank's head of equity strategy Peter Garnry fears it "is looking a little bit stretched."

If Garnry remains positive on Alibaba, albeit with caveats, it's a different story on Amazon. "Alibaba has changed the perception of Amazon and its business model," says Garnry "It is really building some negative momentum."

He also adds that while Tesla continues to perform, "it is looking stretched" but that Siemens and Kommerzbank are both developing positive momentum.

Oil

Militia have taken a key refinery in Libya taking potentially up to 300,000 barrels out of the market and giving oil prices some support. "Libya is a mess at the moment," says Saxo Bank's head of commodities strategy Ole Hansen, adding that Libya has been in part responsible for keeping oil prices low after supply was reinstated after the civil war. 

Any return to civil war would automatically hit global supply.

 A smaller-than-expected rise in US inventory and the onset of Winter demand are also boosting the price, he says.

Gold

Gold "continues to drift" says Hansen with resistance set at 1,160 USD/oz. "Physical demand from Asia is not picking up and there is a lack of Chinese buying."

c
Fleeing Libyan civilians raises the prospect of a return to civil war in the North African
state with ramifications for global oil supply and the oil price. Photo: Thinkstock


Follow Saxo Squawk live throughout the day. Sign up here to keep abreast of all developments throughout financial markets 

Martin O'Rourke is managing editor at TradingFloor.com, the online content platform for Social Trading leader Saxo Bank
5y
Simon Kjaer Simon Kjaer
Love the "From the floor" concept, Martin. Actionable content is the best content!
5y
loviejeankerr loviejeankerr
This comment has been redacted

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

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