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 / 02 January 2018 at 8:00 GMT

Morning Markets: China spreads its New Year cheer

Senior Editor / Saxo Bank




  • China: Manufacturing PMI, for December (already released)
  • France: Manufacturing PMI, for December (08:50 GMT)
  • Germany: Manufacturing PMI, for December (08:55 GMT)
  • EU: Eurozone Manufacturing PMI, for December (09:00 GMT)
  • UK: CIPS / Markit Manufacturing PMI, for December (09:30 GMT)
  • Canada: Manufacturing PMI, for December (14:30 GMT)

China's upbeat manufacturing PMI for December gave stocks a lift in greater China, with equities making solid gains in Shanghai, Shenzhen and Hong Kong. The China manufacturing optimism impacted currencies as well, helping the Australian dollar hold onto recent gains against the USD. Meanwhile it's a busy day ahead in Europe for data watchers, with PMI updates due out for France, Germany, the Eurozone and the UK.

PMI data was also in the news overnight in India after fresh data showed that sharp increases in new orders and output had propelled the manufacturing sector to its fastest pace of expansion in five years in December. But in an ominious sign of what may be ahead for UK manufacturing and the general economy, the Financial Times' annual survey showed that most economists are still gloomy about the country's economic prospects after Brexit and doubt the UK's ability to win a favourable trade deal with the bloc.

Market signals

Asian session

  • Asian stocks faced a mixed start after weak trading in US in the final week of 2017
  • The Tokyo Stock Exchange is closed until January 4, for public holidays
  • Current weakness in the yen benefits Japanese exports, but strains ties with the US
  • China stocks surged; the Shanghai Composite was up 1.19% to 3,346.60 at 0657 GMT
  • The Hang Seng hit its highest in a decade; was up 1.85% to 30,473.52 at 0659 GMT
  • China's manufacturing PMI in December was a robust 51.5, up from 50.8 in November
  • West Texas Intermediate crude fell 0.3% to $60.25/b
  • Gold has risen 0.3% to $1,306.07/oz, its highest since September
  • The volatile cryptocurrency Bitcoin fell to $13,600, down almost 5% since end of 2017
  • N Korea has reportedly been illegally mining cryptocurrencies, adding to investor anxiety
  • Falls for the big banks weighed on Australia's S&P/ASX200, which closed slightly lower

Forex ahead

  • The USD gained slightly against the yen; it was worth ¥112.6600 at 0614 GMT
  • The euro edged higher against the dollar; it was worth 1.2029 at 0614 GMT
  • GBP edged higher against USD; it was worth $1.3525 at 0614 GMT
  • AUD held firm against USD, thanks to China's PMI; it was worth 0.7840 at 0614 GMT

From the Floor

Interesting move. "USD crumbled to end the year on a sour note, it's tough to gauge the quality of the move," saysHardy

China vroom. "Chinese equities start the year on a strong note as the PBoC cuts banks' reserve requirement," says Garnry.

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

Stocks kicked off 2018 with a jump in Shanghai, above, thanks to an upbeat manufacturing PMI for December, while Hong Kong's Hang Seng soared as well. Photo: Shutterstock

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