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 / 20 February 2018 at 8:00 GMT

Morning Markets: Dollar steadies but mood remains skittish

Senior Editor / Saxo Bank




  • Sweden: CPI (08:30 GMT)
  • Germany: ZEW Indicator of Economic Sentiment (10:00 GMT)
  • Ireland: CPI (11:00 GMT)
  • Canada: Wholesale Sales (13:30 GMT)
  • EU: Flash Consumer Confidence Indicator (15:00 GMT)

The US dollar has steadied in Asian trade, logging marginal gains against its peers. But sentiment remains skittish and the possibility of a further bout of volatility will persist for as long as investors harbour concern about the negative fiscal and current account implications of President Trump's tax giveaway.

In equities, an extended winning streak ended yesterday afternoon in Europe and this softness extended into Asia with Japan's Topix and Nikkei both in negative territory. Chinese exchanges and several others in the region remain closed for holidays so the next big question is whether US equities track lower when they resume trading after yesterday's Presidents' Day break.

Today's data release menu includes inflation updates from Sweden and Ireland as well as the ZEW economic sentiment index from Germany and a consumer confidence reading from the Eurozone. 

Confidence of a different type will be on display in Austria today when the UK's Brexit secretary, David Davis delivers a keynote address. According to the Guardian, Davis will say that fears the Tories will plunge Britain into a “Mad Max-style world borrowed from dystopian fiction” after leaving the EU are unfounded. But another story, on Bloomberg, paints a very different picture: "Prime Minister Theresa May’s team is eyeing up a contingency plan to hold back billions of pounds in Brexit payments, if the European Union refuses to give the U.K. the trade deal it wants."

Market signals

Asian session

  • Markets in mainland China, Taiwan and Vietnam remain closed for the New Year holiday
  • Other Asian markets fell, following the US public holiday and Europe's soft close
  • The ASX200 ended the day largely unchanged at 5940 
  • European stock indices closed lower amid light volumes 
  • The RBA minutes released today found jobs and business conditions are improving 
  • But Australia's central bank added retailers can expect a few more tough years
  • Interim results from mining major BHP are due after the market closes in Australia
  • NZ producer price outputs rose 1% on quarter in the fourth quarter of 2017
  • More than half of Japan’s companies do not plan to raise base pay this year
  • Singapore announced a range of tax hikes, including a surprise jump in property levies
  • BoE Governor Mark Carney says Bitcoin has "pretty much failed" as currency
  • Oil prices touched their highest levels in two weeks on Monday
  • South Korea to announce joint military drill plan with US before April
  • Indian police arrested three Punjab National Bank staff over a $1.8bn fraud case
  • Indian shares hit a two-month low on worries about the impact of the bank fraud
  • Toyota will invest $2.8bn in green car research and development

Forex ahead

  • The NZD fell in subdued trading with public holidays in the US and China 
  • The Australian dollar traded at US79.17¢ after the release of the RBA minutes

From the Floor

Directional crunch. "Risk appetite this week is critical and 2,750 on the S&P is the key pivot point," says Hardy.

Heavy Trump talk. "US tariffs on aluminium and steel could weigh on global prices," says Hansen.

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

In opinion

Golden report
Gold prices held steady as a wavering dollar and strong equity markets offset rising inflation expectations that have spurred safe-haven purchases, explains Saxo Capital Markets (Australia).

Crude optimism
Crude has firmed on the prospects of the oil cartel Opec and its partners keeping to their output rebalancing plans, and lower inventories, says the team at Saxo APAC Sales Trading.


Property stocks have taken a hit in Singapore after the government hiked stamp duty on homes worth more than $S1mln in the prosperous Asian city state. Photo: Shutterstock

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