Video

Kim Cramer Larsson
Areas covered in this webinar by Saxo Bank technical analyst Kim Cramer Larsson include EURUSD, USDJPY, GBPUSD, EURGBP, gold, silver, S&P 500, the Nasdaq, the Dax, the FTSE and the Dow Jones.
Article / 27 April 2015 at 7:01 GMT

Morning Markets: Central banks take central stage

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Watchlist

  • UK: CBI Industrial Trends Survey (1000 GMT)
  • US: Services PMI (1345 GMT)
  • US: Dallas Fed Manufacturing Survey (1430 GMT)
  • US: Apple interim earnings report (15:59 GMT)
Central banks are central stage this week as markets get ready for Wednesday's crunch Federal Open Market Committee meeting. The Reserve Bank of Australia's governor and his Bank of Canada counterpart are also scheduled on the speech-making circuit this week. In Europe, the Greek debt drama drags on and there's no sign yet of a resolution.

China's central bank chief economist Ma Jun reiterated over the weekend that his country does not need strong stimulus because the employment situation remains strong and economic restructuring has made positive progress. 

The Shanghai Comp rallied again today and hit a fresh seven-year high while the rest of Asian markets were mixed. In the past month demand for the largest US ETFs tracking Chinese companies has exploded. Demand for both ETFs that protect against downside as well as for those profiting from further upside have soared.

It was a very muted Asian FX session on Monday with the USD majors consolidating in narrow ranges. USDJPY was capped below 119 barrier recouping some losses suffered after the latest disappointing US durable goods orders data released on Friday. Speculators are cutting back on USDJPY long positions unwinding bets that the Bank of Japan may surprise the markets by further easing in its policy meeting Thursday. 


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Market signals

Asia session

  • Japan's Nikkei 225 edges lower after briefly passing key 20,000 point level on Friday 
  • Nikkei 225 was down 0.39% to 19,942.29, at 2.51pm Tokyo time.
  • Australia's benchmark S&P/ASX 200 index again flirted with the key 6,000 point level
  • Iron ore prices jumped 5.5% on Friday in Qingdao, boosting Australian mining stocks
  • Gold falls steeply ahead of Wednesday's FOMC

Forex ahead

  • DXY stood at 96.913 in mid-day Asian trading Monday
  • USDJPY capped below 119 barrier during Asian session
  • Volatility slipped a touch in the EUR options space on Friday but has now found bids.  
  • AUDUSD volatility is notably bid. The one month straddle kicks off the week at 12.25%.
  • FX Options sentiment sees continued strong demand for USD calls in the USDJPY space.

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From the Floor

Watch it, China. "China is at risk of falling into the middle-income trap", says Moltke-Leth
Dollar blues. "The dollar starts the week with its back against the wall," says Hardy


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

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In opinion

Revved up for releases
Stand by for some most significant events and releases – the Fed meeting and 1Q US GDP this week, and the RBA annoucement and US Non-farm payrolls next week, says Kay Van-Petersen.
Beijing's turn to cut rates
The question is no longer if or even when the Chinese central bank will cut interest rates, but by how much. A cut of up to 50 basis points in benchmark rates is on the cards, says Pauline Loong.

Plan B
Nerves are starting to fray as the Greek debt drama drags on. Stephen Pope wonders whether its Eurozone partners are finally running out of patience.

Loonie pumped on oil
The Canadian dollar is riding high on the back of strong oil prices and a generally weak US dollar, writes Michael O'Neill.
federal reserve
 No doubt about it, FOMC is the week's key risk event. Photo: iStock

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Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday. Click here to make sure you're up to date with the latest developments.



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