Article / 12 January 2018 at 8:00 GMT

Morning Markets: Equity bulls push back, EUR in focus ahead of US CPI

Head of Editorial Content / Saxo Bank
Denmark







Morning Markets

Watchlist

  • Japan: Balance of payments (published)
  • Spain: CPI (0800 GMT)
  • Sweden: CPI (0830 GMT)
  • Greece: CPI (1000 GMT)
  • US: Advance monthly sales for retail and food services (1330 GMT)
  • US: CPI (1330 GMT)

A return to form in Thursday's US session saw the S&P 500 rise 0.7% to a new record, and bourses in Hong Kong, Australia, and Shanghai followed suit. Japanese shares were not able to join the trend, however, and the Nikkei 225 closed 0.24% lower at 23,653.82. 

The euro is in focus today after a more-hawkish-than-expected signal from the European Central Bank sent the common currency more than 120 pips higher against the dollar.

According to Saxo head of FX strategy John J Hardy, the pair's holding of its 1.20-plus gains means that bulls have taken firm control.

In commodities, Brent crude's surge past the $70/barrel mark has boosted energy stocks with today's decision by US president Trump on the Iranian sanctions a key driver for crude.

Today's key calendar release is US CPI at 1330 GMT.

Market signals

Asian session

  • Brent crude has soared to $70/barrel for the first time since late 2014
  • Opec's curbs and concerns about disruptions in Iran are driving oil higher
  • Hong Kong's Hang Seng headed higher; it was up 0.60% to 31,306.02 at 0633 GMT
  • The Shanghai Composite was up by a slim 0.13% to 3,429.64 at 0644 GMT
  • South Korea's Kospi Composite gained ground; it was up 0.40% to 2,497.88 at 0615 GMT
  • Miners helped Australia's S&P/ASX200 edge higher; it closed up 0.041% at 6,070.10
  • Japan's Nikkei 225 retreated again; it was down 0.29% to 23,641.06 at 0536 GMT
  • Japan's current account surplus was just ¥1.347 trillion in November, below expectations
  • China’s export growth came in at 10.8% for December in yuan terms
  • China's trade surplus for 2017 was $422.5 billion, lower than in 2016
  • China's retail sector may make $5.8 trillion this year, says Japanese bank Mizuho
  • Beijing has committed to spending $12bn on regional projects at the Mekong river summit
  • The infrastructure splurge extends China's influence over southeast Asia

Forex ahead

  • AUD gave up some of its recent gains and dropped south of the 0.79 handle
  • Hawkish ECB minutes drove EUR higher Thursday; currency broadly holding its gains

From the Floor

Euro flying high. "It may have boosted the euro, but the ECB's latest statement is not something that should concern equity investors," says Garnry.

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

In opinion

Euro optimism
The optimism coming out of Europe, and mediocre PPI numbers for the US, gave the US dollar a bashing overnight, says Michael O'Neill.

Fits and starts
Good commodities numbers might propel the ASX higher, but it's always liable to find an excuse not to perform, says Saxo Capital Markets.

Asia steadies
There was movement in Asia in early trading - the EURUSD was the pair most talked about and acted on, says the Saxo team in Singapore.

Euro surges
The release of the minutes of the ECB's most recent policy meeting sparked a surge in the euro on Thursday, and the EURUSD bulls seem to be back in command, says John Hardy

 
 With Thursday's surge, the EURUSD bulls seem to be back in charge. Photo: Shutterstock

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