Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 21 August 2017 at 7:00 GMT

Morning Markets: Asia-Pacific shares start the week in reverse

Consulting editor / TradingFloor




  • US: Chicago Fed national activity index (1230 GMT) 

Asia-Pacific equities fell on Monday after Wall Street stocks ended in the red on Friday when a brief spurt from the firing of White House chief strategist Steve Bannon quickly fizzled.

Australian, Japanese and South Korean stocks fell, but the Shanghai Composite gained against the weaker trend seen elsewhere in the region.

In the US, the S&P 500 ended at a six-week low on Friday after the "Bannon bump" faded. Bannon's firing removed a proponent of economic nationalism from the Trump team, but stoked worries about what lies ahead, including whether Bannon will sabotage Trump's efforts from his reclaimed post as chairman of the radical right-wing Breitbart news channel.

Senior US government officials said the Trump administration would next turn to work on tax reform in a bid to restore confidence after recent legislative failures.

Oil prices jumped on Friday on short-covering, and clung to their gains during Monday's Asian trading session.

Thailand’s economy expanded in the second quarter at its fastest rate in four years.

The week gets off to a slow start in terms of economic data, with only the Chicago Fed's July activity report due on Monday at 1230 GMT. Meanwhile, markets keenly await the Fed's annual Jackson Hole policy symposium on August 24-26.

The US and South Korea begin joint military exercises on Monday, with North Korea warning of a "merciless strike"

Market signals

Asian session

  • Friday's slide on Wall St weighed on sentiment in Asia today
  • Japan's Nikkei 225, Australia's ASX200 and Korea's Kospi were all down 
  • The US has launched a probe of China's intellectual property policies
  • Auto trade emerged as a roadblock as the first round of Nafta negotiations wrapped up
  • A US destroyer was damaged in a collision with an oil tanker off the coast of Singapore
  • Higher prices for crude and iron ore buoyed shares in the resources sector
  • Confidence at Japanese manufacturers rose to its highest level in a decade, a poll showed

Forex ahead

  • AUD was at US79.24 cents in late Asian trade, drifting lower throughout the session
  • India's rupee has slumped due to border tension with China
  • NZD rose after news of Steve Bannon leaving Trump's administration

From the Floor

Bannon out. "We saw risk rallying and USDJPY rallying on this,” says Hardy

Strong as iron. "Iron ore was up another 7% on China buying," says Bresler

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

In opinion

FX traders are likely to adopt a wait-and-see approach to the euro until European Central Bank president Mario Draghi speaks at Jackson Hole later this week, predicts James Picerno.

Market drivers
Jackson Hole will be in the spotlight this week, while North Korea and changes to 'Team Trump' are driving market uncertainty, says Kay Van-Petersen in his Macro Monday column.

NAFTA next
US president Donald Trump needs a win, and he might have a chance with the renegotiation of the North American Free Trade Agreement that is now underway, writes Michael O'Neill.

Drills cause caution
Asian markets were lower as investors remained cautious about the joint US-South Korea military drills taking place this week, write Saxo's Singapore trading team.


The US may impose trade sanctions on China over intellectual property concerns; the steel sector (above) has also sparked tensions between Beijing and Washington: Photo: Shutterstock

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