Article / 27 February 2017 at 8:00 GMT

Morning Markets: Anxiety over Trump speech leaves its mark

Consultant editor

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  • Spain: CPI flash estimate (0800 GMT)
  • EU: Monetary developments in the euro area (M3) (0900 GMT)
  • EU: Business and consumer surveys - business climate indicator (1000 GMT)
  • US: Advance report on durable goods (1330 GMT)
  • US: Pending home sales index (1500 GMT)

Gold continues to find support, opening roughly $20/oz higher than it did on Thursday morning. The safe-haven metal surged up to three-month highs at the end of last week on the back of ongoing uncertainty in Europe and renewed anxiety over upcoming Trump administration policy announcements.

The US president is expected to lay out his plans for the next four years at a speech before a joint session of Congress on Tuesday. Since January 20, the dollar and US indices have soared on the back of optimism over what Trump’s presidency might have in store. However, comments made by his treasury secretary, Steven Mnuchin, last week are widely believed to have provided a sneak peek at what Trump intends to say tomorrow and it’s not going down well.

The dollar fell to its lowest against the yen since February 9 over the weekend and opens today fractionally lower than it did on Friday. However, all three major US indices are up from their previous opens.

Across the Atlantic, the FTSE 100 and the Dax are not taking the Trump presidency quite so in their stride, especially when coupled with the possibility that his ideological cousin Marine Le Pen stands a chance in France’s upcoming elections.

That said, while Le Pen is currently the first-choice favourite for the French electorate, the Economist notes that strong opposition to her far-right platform stretches across voters for almost all other serious contenders in the race, leaving the odds of her actually making it through the doors of the Elysee Palace are around 5%. 

Market signals

Asian session

  • Wall Street's rise to new highs on Friday failed to lift gloomy investor sentiment in Asia
  • Japan's Nikkei 225 took a sharp 1%-plus tumble, wiping out recent gains
  • Australia's ASX200 closed in the red for the sixth time in seven sessions
  • Average wages in China's manufacturing sector are now above Brazil's and Mexico's
  • Oil prices slipped on US inventory concerns and despite Opec's output cuts progress
  • The gold price has hit its highest level in more than three months
  • New rules could leave smaller banks in China vulnerable to bank runs or bankruptcy
  • Markets are nervous ahead of Donald Trump's speech to Congress on Tuesday
  • Investors will be disappointed if Trump fails to give details of his tax, fiscal boost promises
  • Australian wages grew by just 0.48% in Q4 last year: Australian Bureau of Statistics
  • Aussie corporate profits surged 20.1% in Q4, 2016, well above the expected 8%

Forex ahead

  • USD added 0.2% to ¥112.20, after falling as low as 111.920, its lowest since Feb 9
  • USD gained ground against the yuan; it was worth 6.8606 yuan at 0237 GMT
  • AUD fell below 0.77; it was worth 0.7693 at 0645 GMT
  • GBP fell 0.4% against the US dollar after a Times report on Scottish referendum

From the Floor

“Gold is supported by political risks and lower real yields,” — Hansen.

“All eyes are on speeches from Trump and Yellen this week,” — Lee.

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

Improved consumer confidence and job creation have helped lift residential sales in the US, but the prospect of rate hikes could hurt home buyer enthusiasm, says James Picerno.

Get real, BoJ

The Bank of Japan has set itself a 2% inflation goal, but one member of its board thinks the target is unrealistic, given Japan's demographic constraints and slow GDP growth, says Max McKegg.

Ore price vertigo

The Reserve Bank of Australia has joined a chorus of voices that believe the iron ore price has risen too high, says the Sydney-based team at Saxo Capital Markets Australia.

Sweden by the numbers

Donald Trump's "last night in Sweden" remarks painted a catastrophic picture of the Scandinavian country, Clemens Bomsdorf asks whether economic data reflect the president's claims.


Japan appears busy and vibrant, but the reality of its ageing, shrinking population means it's unlikely to rise above slow GDP growth, or hit the BoJ's 2% inflation goal. Photo: Shutterstock

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