Article / 12 October 2017 at 7:00 GMT

Morning Markets: Equities roar higher as Fed waxes dovish

Senior Editor / Saxo Bank




  • France: CPI and HICP (06:45 GMT)
  • Sweden CPI and HICP (07:30 GMT)
  • EU: Industrial production (09:00 GMT)
  • US: PPI (12:30 GMT)
  • US: Unemployment claims (12:30 GMT)
  • EU: President Draghi speaks (14;30 GMT)

European equities are poised for a positive start Thursday after Asian bourses tracked another record-breaking session on Wall Street, largely due to some dovish minutes from the Federal Reserve.

All three leading US indices – the Dow, the S&P 500 and the Nasdaq – clocked up all-time high closes after several Federal Open Market Committee members expressed concern that the low-inflation environment might persist longer than previously thought. The dollar took the news badly, sending the DXY index, which tracks the greenback against a basket of its peers, lower.

Meanwhile, Spain's constitutional crisis has faded from the spotlight (for now, at least) after prime minister Rajoy demanded that the secessionist Catalans explain whether they regard themselves as independent or not, and warned that if so, their regional parliament might be suspended. 

Finally today, more news of Brexit-induced misery from the UK: Hays, the country's biggest recruitment agency, reported that its pace of hiring had slowed, with prospective new hires unsettled by the continuing uncertainty surrounding Britain's departure from the EU. In addition, diplomats who are privy to the Brexit talks with the EU have told the Financial Times that  things "are at a virtual political standstill, with no substantial advances made in the fifth round of negotiations".

Market signals

Asian session

  • Asian markets were mixed as investors digested the Fed's minutes
  • The ASX200 closed up 0.6% to 5772 helped by the big banks
  • European tensions eased as the Catalan leader stopped short of declaring independence 
  • This helped the euro push back towards $US1.19
  • Iron ore is back below $60/tonne for the first time since late June over steel supply fears
  • Donald Trump has 'lit the wick of war', North Korean Foreign Minister reportedly said
  • Australia's MI inflation expectations rose to 4.3% in October from 3.8% in September
  • The value of Australian investor loans rose 4.3% in August after a 3.7% fall in July
  • Australian home lending grew by 1% in August, after 2.9% growth in July
  • New Zealand's food prices fell 0.2% in September

Forex ahead

  • The Australian dollar crept back above US78 cents
  • The USD hit a two-week low against a basket of currencies

From the Floor

USD standstill “Wednesday’s FOMC minuted didn’t shift the bar in terms of Fed expectations,” says Hardy

Safe-haven “Gold is challenging resistance just south of the $1,300/oz level,” says Hansen

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

In opinion

Fake news
If the US CPI comes in as high as 2.3%, cooler heads will recognise the skewing of the measure by hurricane-affected petrol prices, writes Max McKegg.

Steel trap
Miners weighed on the local market at the open after the iron ore price fell below $60, writes the team at Saxo Capital Markets (Australia). 


Spain's Prime Minister put Catalan leader Carles Puigdemont, pictured, on notice that he could impose direct rule on the region. Photo: Shutterstock

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12 October
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