Video

Playlist

Show less
10:20
Morning Call: Softer dollar boosts commodities, stocks
#SaxoStrats
21 September 2018 at 7:40 GMT
10:35
Morning Call: Markets stabilise as trade tensions ease
#SaxoStrats
20 September 2018 at 8:28 GMT
10:03
Morning Call: Chinese shares surge as trade war rages on
#SaxoStrats
19 September 2018 at 8:36 GMT
8:51
Today’s FX chart analysis - video
John J Hardy
18 September 2018 at 10:28 GMT
9:42
Morning Call: Trump hits China with tariff plan
#SaxoStrats
18 September 2018 at 7:29 GMT
2:45
The week ahead in macro
Kay Van-Petersen
17 September 2018 at 8:11 GMT
27:58
Macro Monday week 38: Keep Global Macro and Carry On
Kay Van-Petersen
17 September 2018 at 8:02 GMT
10:00
Morning Call: US yield curve lifts, boosting dollar
#SaxoStrats
17 September 2018 at 7:23 GMT
43:30
Technical analysis webinar – A view of the market: Larsson
Kim Cramer Larsson
12 September 2018 at 14:44 GMT
11:15
Morning Call: Chinese shares fall further
#SaxoStrats
11 September 2018 at 8:36 GMT
11:34
Morning Call: USD, SEK in focus
#SaxoStrats
10 September 2018 at 7:49 GMT
2:47
The week ahead in macro
Kay Van-Petersen
10 September 2018 at 7:37 GMT
14:02
Morning Call: Is Japan next?
#SaxoStrats
07 September 2018 at 7:35 GMT
Video / 15 March 2017 at 8:36 GMT

From the Floor: Oil holding the key to equity futures — #SaxoStrats

#SaxoStrats
   • NZDUSD rises by 0.4% in Asian session ahead of NZ GDP, FOMC
   • US rate hike '100% priced in', traders await statement: Hardy
   • Dutch election a key sentiment test for euro, but not more
   • Equity markets 'dancing to the tune of crude prices': Garnry
   • Breakout model goes long cocoa, short German bunds
   • '2,350 is the key post-FOMC downside level in the S&P 500': Garnry
   • EIA data 'make or break' for resurgent crude: Hansen
   • Surveys point to 3m barrel rise, though some analysts are moving targets lower
   • FOMC could be 'sell the rumour, buy the news': Fasdal

SaxoStrats
By Michael McKenna

After a period of relative dormancy, crude oil prices are in the headlines again following last week’s post-API/EIA selloff and the V-shaped recovery that started Tuesday after the Saudi energy minister commenting that February’s production gains went into storage rather than into the export market.

According to Saxo Bank head of commodity strategy Ole Hansen, today’s EIA inventory report is a “make-or-break” affair; on Tuesday, API showed a surprise inventory draw that has some analysts retreating from their calls for a 3 million barrel inventories gain in today’s EIA report at 1430 GMT.

An upside correction in crude, adds Hansen, could see WTI head for the $50.25/barrel level and Brent for $52.95/b before meaningful resistance kicks in.

Crude oil

Create your own charts with SaxoTraderGO click here to learn more

Source: Saxo Bank 

The impact of these price movements is being felt beyond commodity markets, says Saxo Bank head of equity strategy Peter Garnry, noting that “oil could be the catalyst for the next big move in equities”.

While Asian markets followed the Tuesday US session lower, European bourses are largely green this morning with the FTSE, Dax, and CAC 40 all in postitive territory as the session begins. In an overall sense, however, the euphoria that has propelled US stocks in particular to their present levels could have feet of clay.

“We have seen [Yale economist, Nobel laureate, and forecaster of the 2000 equities bubble] Robert Shiller out joining a growing chorus claiming that stocks are now at dot-com era levels,” says Garnry, adding that he sees 2,350 as the key downside support level in the benchmark S&P 500.

Beyond the swings seen in crude and the growing suspicions regarding stock valuations, this week remains full of risk events with today playing host to both the Federal Open Market Committee meeting and the Dutch election.

On the former, Saxo Bank head of forex strategy John J Hardy reports that a 25 basis point rate hike is 100% priced in with investors primed to pore over the dot plot forecasts and the wording of the committee’s statement.

“At the moment, we have two rate hikes fully priced in for 2017,” says Hardy, adding that an upside surprise today could see markets price in three US rate rises before the end of 2017.

If, however, the Fed’s statement is more cautious, then Simon Fasdal believes that the market could shift its focus back to the panoply of (mainly political) risk events facing global markets, resulting in a “sell the rumour, buy the news”-type outcome for investors in US core bonds.

On the political front, of course, the Dutch election represents the latest front in the ongoing battle between what the Economist and the Financial Times call “the liberal international order” and a resurgent nationalism that is sceptical of globalisation and particularly immigration.

As far as the EURUSD is concerned, however, Hardy believes the Dutch vote will be “a key sentiment test” and not more, while Fasdal sees things similarly, calling even a victory by the nationalist Geert Wilders “a signal”.

EURUSD
Source: Saxo Bank  

In the meantime, and before the outcomes of these two events are known, we have UK unemployment figures at 0930 GMT and US CPI and Retail Sales readings for February in the pipeline at 1230 GMT.

Any big surprises within these data points, particularly UK unemployment and US CPI, could move assets and particularly currencies, with sterling especially vulnerable in light of the ongoing Brexit process.

FOMC
Any dovish signs from today's FOMC meeting could see 
bond traders buying the news. Photo: Shutterstock 
 
Michael McKenna is an editor at Saxo Bank

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