Article / 22 November 2017 at 8:00 GMT

Morning Markets: Equities buoyant as market awaits UK budget

Senior Editor / Saxo Bank




  • US: Unemployment Claims (1330 GMT)
  • US: Durable Goods Orders (1330 GMT)
  • EU: Flash Consumer Confidence (1500 GMT)
  • US: University of Michigan Consumer Sentiment - Final (1500 GMT)
  • US: Crude Oil Inventories (1530 GMT)
  • US: FOMC Meeting Minutes (1900 GMT)

European equities are poised to open higher today, boosted by strong economic growth data globally which has translated into more positive investor sentiment. This bullish mood lifted US stocks on Tuesday with the S&P500 touching the 2,600 level for the first time. Later, in Asia, markets also rallied and Hong Kong's Hang Seng index was the standout performer, when it soared above its 30,000 point milestone – the first time it has done so in a decade.

In addition to data releases including US jobless claims and durable goods orders and EU consumer confidence, the market will today focus on the UK 2018 budget which the chancellor, Phillip Hammond, is due to unveil at 12:00 GMT. 

With Brexit looming, and against a treacherous backdrop of a weakening economy and public finances, Hammond must attempt a tricky balance between keeping spending under control and mollifying the generation of millennials who are increasingly dissatisfied with Tory rule. As a sop to these younger voters who have been priced out of the housing market, especially in London, Hammond is expected to prioritise investment in housing as well as technology R&D and teacher training. 

Still, gaffes such as a recent claim that "there's no unemployment in Britain" have weakened the position of one of the very few UK cabinet members who voted Remain in the Brexit referendum. And, amid reports of increasing dissent between him and prime minister Theresa May, some observers doubt whether his moderate approach to the Brexit process can sustain much longer beyond budget day.

Market signals

Asian session

  • Asian markets headed higher following the tech stock-led rally on Wall St on Tuesday
  • Japan's Nikkei 225 added to Tuesday's gain; it closed up 0.48% at 22,523.15
  • Hong Kong's Hang Seng rose above 30,000, beating its peak set in 2007
  • The Hang Seng was up 0.80% to 30,057.75 at 0717 GMT
  • Oil prices have edged higher ahead of next week's Opec meeting
  • The online retailer Amazon is expected to start trading in Australia this week
  • Australia's trend estimate for construction work done rose 0.6% in the September quarter
  • The S&P/ASX200 closed up 0.46% at 5,991.10; miners help drive it higher
  • Janet Yellen says we 'must keep an open mind and not be trapped by forecasts'
  • Wall Street will be closed for the Thanksgiving holiday on Thursday
  • Hewlett Packard shares fell after CEO Meg Whitman announced she will step down
  • Zimbabweans are hopeful of a better future following President Mugabe's resignation

Forex ahead

  • USD lost ground against the yen; it was worth just ¥112.1005 at 0635 GMT
  • The Korean won hit a two-year high; USD was worth 1,087.310 won at 0635 GMT
  • The Mexican peso made gains on progress in NAFTA talks
  • AUD rebounded on comments from the RBA governor; it was worth 0.7573 at 0635 GMT

From the Floor

Yen rises. “USDJPY is heading lower on the flattening of the US yield curve,” says Hardy

Misleading? “We think the flattening yield curve remains a false signal for equities,” says Garnry

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

In opinion

Bear hunt
Bears have been stalking the Australian dollar over the last couple of months for a number of reasons, explains Max McKegg.

China demand hits aluminium
Aluminium fell towards lows hit last week on expectations the pace of supply cuts from China would slow and demand growth would weaken, writes Saxo Capital Markets (Australia).

Staples outlook mixed

Sugar extended its decline on supply prospects, while cocoa made up some lost ground after hitting a two week low on Monday, says the team at Saxo APAC Sales Trading

 Crude oil production curbs will be on the table when Opec meets in Vienna on November 30. Photo: Shutterstock

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fxtime fxtime
The UK Budget will be a 'fudged' accounting exercise like all the predecessor versions regardless of party in charge. It will be news headlines things like the current cheaper railfare for under 30's but no real economic changes. Lets hope one day the UK will have an economic plan that it adheres to and devises a taxation policy that even remotely looks like a planned taxation policy as opposed to the current scatter-shot policies we have at present. Even tax specialists (ATII) struggle with tax planning just now.


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