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 / 04 January 2018 at 8:00 GMT

Morning Markets: Equity bull run roars onwards

Senior Editor / Saxo Bank




  • Japan: Manufacturing PMI (already published)
  • France: Services PMI (0850 GMT)
  • Germany: Services PMI (0855 GMT)
  • EU: Eurozone Services PMI (0900 GMT)
  • UK: CIPS/Markit Services PMI (0930 GMT)

The equity bull run continues to roar across markets, helped by upbeat US and Japanese data that triggered a solid Wednesday performance on Wall St and record-breaking advances in Asia.

The Nikkei 225 was a standout performer, helped by Japan's upbeat manufacturing PMI data for December, it closed an astonishing 3.25% ahead, its highest level since 1992. 

The rally has extended into crude oil too with market worries about a large drawdown in US inventories as well as fears that the ongoing Iranian protests might disrupt supply, sending WTI, the US benchmark, above $62 a barrel and Brent beyond $68.

A rather full economic calendar today may cause further strong moves across markets with the key data points from Europe being a raft of services PMIs, with a particularly strong gain forecast for Germany. Later, from the US, we'll have ADP unemployment weekly claims, followed by EIA natural gas and petroleum storage statistics.

Market signals

Asian session

  • The Dow Jones and the Nasdaq surged to record highs on Wednesday
  • The hefty gains on Wall St gave sentiment a lift in Asian markets
  • Japan's Manufacturing PMI was a robust 54.0 in December, a three-year high
  • An editorial in China's People's Daily calls the rise of Bitcoin as a bubble
  • JPMorgan Chase lifted  China's 2018 growth forecast from 6.5% to 6.7%
  • Beijing has threatened to retaliate against any Trump's protectionist moves
  • The UK may join the Trans-Pacific Partnership free trade group after Brexit is finalised
  • Japan's Nikkei 225 jumped 3.25% on its first trading day of the year
  • The broader Topix hit its highest level since 1991
  • Chinese stocks rose after services industries indicated a pick-up in growth last month
  • China’s Shanghai Composite was up 0.4% in late trading 
  • Australia’s S&P/ASX 200 was unchanged while the Kospi fell 0.5%
  • WTI has hit its highest in three years, on falling inventories, Iran unrest concerns
  • West Texas Intermediate crude  approached $62/barrel 
  • Gold dropped 0.4% to $1,307.93/oz.

Forex ahead

  • EURUSD was little changed at $1.2017. 
  • In afternoon trade, GBPUSD was at $1.3520.
  • The Japanese yen traded at 112.65 per dollar
  • AUDUSD was at 78.34, close to its October high

From the Floor

Economic strength. "US ISM manufacturing data was very strong but we only saw a 15 pip reaction in EURUSD," says Hardy.

Japanese cheer. "Sentiment continues to be extremely strong, with gains driven by automation and robotics stocks," says Garnry.

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

In opinion

Crude fears

Oil prices have risen on news of a large US drawdown in inventories, as well as fears that unrest in Opec-member Iran could disrupt crude supplies, said Michael O'Neill.


Britain's handover of Hong Kong may not have signalled its exit from Asia after all, given talk of the post-Brexit UK joining the Trans-Pacific Partnership trade pact. Photo: Shutterstock

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Anatoly Vyacheslav Anatoly Vyacheslav
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