Article / 08 November 2017 at 8:00 GMT

Morning Markets: Equities exhausted?

Head of Editorial Content / Saxo Bank
Denmark

Morning Markets


Watchlist

  • China: Trade balance, October (already announced)
  • Canada: Housing starts (1315 GMT)
  • US: EIA Weekly Petroleum Status (1530 GMT)
  • New Zealand: Monetary Policy Statement (2000 GMT)
  • Japan: Balance of Payments (2350 GMT)

The recent rally in crude came off the boil Wednesday leading energy shares lower with PetroChina falling by 1.2% and China Petroleum down 1.1%. APAC stocks were overall mixed with the S&P ASX 200 rising 0.03%, the Hang Seng falling 0.18%, and the Nikkei 225 declining by 0.10% after reaching levels not seen for 25 years earlier this week.

The Asian session followed a slight dip in the S&P 500 Wednesday led by financials while the Saudi Tadawul index fell by 0.9% as the anti-corruption purge of crown price Mohammed bin Salman continues to upset the country’s longstanding elite order.

Gold prices backtracked in Asia but are rising from overnight lows near $1,272.40 to challenge $1,279/oz into the European open.

Today’s data calendar sees a Polish interest rate decision out at 1059 GMT, Canadian housing starts at 1315 GMT, the weekly petroleum status report from the US Energy Information Administration at 1530 GMT, and a rate decision from the Reserve Bank of New Zealand at 2000 GMT.

Market signals

Asian session

  • Donald Trump urged Pyongyang to "make a deal" to end the nuclear standoff
  • He also urged Russia and China to stop all trade with N. Korea in a speech in Seoul
  • China's trade surplus with the US was $26.6 bn in October; it was $28.1bn in September
  • Trump will discuss China's massive trade surplus when he meets Xi Jinping in Beijing
  • The Nikkei 225 closed down 0.10% at 22,913.82, as Tuesday's rally faltered
  • The Hang Seng rally ran out of puff, after hitting its highest level since 2007 on Tuesday
  • The Hang Seng closed down 0.18%
  • Oil prices eased overnight after rising to the highest since July 2015
  • Australia's largest bank, CBA, reported a first-quarter profit lift of 6% 
  • Australia's S&P/ASX200 closed up by just 0.03% at 6,016.30
  • The commodities rally that had pushed the benchmark index higher on Tuesday stalled

Forex ahead

  • The US dollar edged higher against the yen; it was worth ¥114.14 at 0755 GMT
  • Lower commodity prices weighed on AUD; it was worth just 0.7660 at 0755 GMT
  • Sterling slides lower with cable down to 1.3140, EURGBP up to 0.8822.

From the Floor

Proxy vote. "The Virginia byelection saw Trump lose pretty resoundingly," says Hardy

China slowdown. "We expect weaker commodity imports the rest of the year," says Hansen

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

In opinion

Profit lift
Commonwealth Bank's Q1 profits have lifted 6% to $A2.65 billion, helped by higher rates for interest-only home loans and lower bad debts, writes Saxo Capital Markets (Australia).

Trump, Xi in spotlight

There's plenty of action in commodities today, and the leaders of the world's top two economies are in the spotlight, as Trump heads to Beijing, says Saxo APAC Sales Trading.

Dollar to rally?

The next focus for the dollar is on powering to new highs across the board as EURUSD shows continuation lower and USDJPY hesitates, says John Hardy.

Euro downside

EURUSD has broken out of several top and reversal patterns and now appears poised for a downside move to at least 1.14, says Kim Cramer Larsson.

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North Korea will be on the agenda when Donald Trump, Vladimir Putin and Xi Jinping meet at the Asia Pacific Economic Cooperation summit in Vietnam later this week. Photo: Shutterstock

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