Article / 14 October 2016 at 11:42 GMT

Mid-session Europe: The big bank theory

Saxo Markets


Foreign exchange
In stock markets bank and tech shares are watched today. Samsung in recent days managed to gain back some of the losses it has made in the light of the fire issues plaguing its model line. Apple shares have clearly been on the rise since its mobile tech rival got itself in trouble concerning its quality. This European morning, however, it was Samsung that was up again while Apple fell. 

Financials are getting a lot of attention as today JP Morgan Chase, Wells Fargo and Citi Group deliver their Q3 earnings results this afternoon. Wells Fargo will have to do particularly well to regain investor trust after it recently came to light that employees had created fake accounts. Italian banks did well after a loan selloff.

Also interesting is that among mining shares, Boliden AB added 1.5%, iron ore and copper producer Anglo American picked up 2.2%, and steel producer ArcelorMittal SA advanced 2.6%.

  • US September Advance Retail Sales (+0.6% exp.) (1230)
  • US September PPI Final Demand (0.2%) (GMT 1230)
  • US August Business Inventories (0.1%) (GMT 1400)
  • US October Preliminary Michigan Confidence (91.9 exp.) (GMT 1400)

  • Fed’s Rosengren to speak (GMT 1230)
  • Fed’s Chair Yellen to speak (GMT 1600)
Forex developments
EURUSD: The euro continues to trade weak this morning. 

USD: More focus has been on USD over the last 12 hours with a lower USDCNY fix causing a quick USD selloff; on the horizon this afternoon is US retail sales and Michigan consumer confidence with the market expecting strong data meaning the risk is weak numbers and further USD correction. Overnight in Asia, USDTHB collapsed 1% on open whilst USDSGD sold off to 1.3375 in the the MAS policy announcement before rallying 7% higher to trade at 1.3894

GBP: Sterling traded a relatively tight range by recent standards with some focus towards the US data later. With a 1.21 technical base, traders are looking at recovery spikes in GBPUSD with 1.2420, 1.25 as the first resistance.  

The lower than expected USDCNY fix overnight lead to some short covering in AUD and NZD. Positioning is said to be lighter over the past few weeks so both ccy’s have some room to the topside if today’s US data is weak.  

FX Options volatilities
Vols trading a bit softer so far today. The GBP vol curve still looks frightened by last week’s flash crash in spot and the vol curve is still trading at high levels, but is slowly coming a bit lower now. We have seen a few buyers of Monday GBP options which could be a protection against the risk of a gap on the Sunday opening. Otherwise market has been offered today. 

Fixed income




European stocks stepped higher Friday. Dax added 1.2% to 10,535, while CAC 40 was up 1.3%, and the UK FTSE 100 rose 0.6% to 7,017.

Bank shares rose and mining stocks got a lift from upbeat inflation news out of China. Consumer price inflation rose more strongly than expected to 1.9%, while producer prices edged up 0.1% in September. That marks the first time the factory-price gauge has been positive in more than four years. Burberry Group shares were also buoyed by the Chinese data, rising 2.1%. The luxury-goods maker takes in more than 14% of its revenue from mainland China. Among mining shares, Boliden AB added 1.5%, iron ore and copper producer Anglo American picked up 2.2%, and steel producer ArcelorMittal SA advanced 2.6%.

Meanwhile, bank shares rose, with Banca Popolare dell’Emilia Romagna up 4.1%. The Italian lender has sold a 618 million-euro portfolio of bad loans, and it will hold a shareholder vote this weekend on a proposed merger with Banca Popolare di Milano. Milano’s shares rose 5.4%.

In other moves, Man Group rallied 13% after the investment firm said it plans to buy back up to $100 million of its own stock. It reported it had 6% more funds under management at the end of September, compared with three months earlier.

Attention will turn later Friday to monthly U.S. retail sales, while Federal Reserve Chairwoman Janet Yellen is scheduled to speak in Boston after European trading closes.

The replay of our Morning Call can be found here 

Join our Weekly OptionsLab on Wednesday  to find out more on covered call strategy.

Read more

Mid-session Europe is part of TradingFloor's stable of commentary running through from the US close, through Asia to the European session. Click below to keep abreast of all the developments as they happen.

Asia:      Morning Report APAC: Impact of soft China trade data felt across Asia

Europe: Morning Markets: Skittish stocks boost safe havens

Samsung Underground

Samsung shares have dipped in the light of the S7 scandal. Photo: iStock

— Edited by Clemens Bomsdorf

The Global sales Trading desk is a multi-asset team providing customised trading solutions


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
- 沪ICP备13028953号-1

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