Article / 21 March 2017 at 8:00 GMT

Morning Markets: EU ready to move on Brexit, EURGBP rising

Head of Editorial Content / Saxo Bank

Morning Markets


  • UK: Consumer Price Index (0930 GMT)
  • UK: CBI Industrial Trends Survey (1100 GMT)

Tuesday's Asian session saw the US dollar finding support while regional bonds strengthened and oil prices stabilised around the $49/barrel mark for WTI and around $52/b for Brent crude.

Into the continental open, European finance ministers announced they are ready to begin Brexit negotiations in the wake of UK prime minister Theresa May's Monday announcement that Article 50 will be invoked March 29. GBPUSD is ascending into the London bell after plunging south of 1.2350 on the news.

Overnight, the Reserve Bank of Australia was out with minutes stating that the central bank is concerned about the country's overheated property market and is growing less sanguine on the prospects for an uptick in growth and inflation. AUDUSD lost about 35 pips on the release but is gaining into the European morning, sitting just north of 0.7710 after briefly dipping below the 0.77 handle.

Monday also saw FBI head James Comey confirm that the agency is investigating links between Russia and the Trump campaign, while denying that it had any information regarding the US president's allegation that his residence had been wiretapped by outgoing president Barack Obama into the vote.

Hong Kong's Hang Seng index continues to climb, closing the day up 0.3% after triggering Saxo Bank's breakout model on Friday.

Monday also saw French election frontrunners Marine Le Pen and Emmanuel Macron face off in a televised debate centred on immigration and the revival of France's moribund economy; the two politicians are essentially tied heading into the first-round vote on April 23 in an election that many see as a bellwether for the fortunes of populist nationalism in Europe.

Market signals

Asian session

  • Asian markets were mixed after a subdued Wall Street session
  • The Nikkei 225 dropped 0.72% within the first 10 minutes of trade on a stronger yen
  • The ASX200 was pulled down by its materials sub-index and closed off 0.07%
  • South Korea's Kospi was up 1.06% on the day
  • Hong Kong's Hang Seng was higher on corporate profit optimism
  • RBA monetary policy meeting minutes highlighted threats in the property market
  • The ABS ​Q4 house price index beat expectations, up 4.1% for quarter, 7.7% for year 
  • China has delayed indefinitely tough new cross-border e-commerce laws
  • Gold fell and copper led a retreat in base metals

Forex ahead

  • The US dollar added 0.2% to ¥112.79 yen after it dipped as low as ¥112.26 
  • AUDUSD see-sawed on house data and RBA minutes after trading as high as 0.7747
  • The US dollar index continues to decline into Thursday's Obamacare vote
  • EURUSD is gaining ground but still sits shy of the key 1.08 handle
  • EURGBP broke the 0.87 handle overnight and is strengthening into the European open as Brexit headlines loom large

From the Floor

French race.Macron confirmed his credibility as a likely winner at the second stage,” says Hardy

Oil extension.It is a mammoth task for Opec to agree to an extension on the six-month deal,” says Hansen 

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

In opinion

UK consumer prices are forecast to hit 2%, the highest in three years. Is that a sign that the BoE is losing control of inflation, asks James Picerno.

Aussie high
The AUD hit a fresh 2017 high of 0.7747 as oil prices fell and investors worried about the US's protectionist stance on trade, writes the team at Saxo Capital Markets (Australia).

Dollar at the crossroads

The USD is firming into today's open but the dollar remains something of a question mark into Thursday's vote on the repeal of Obamacare, says John J Hardy.

After the Fed

Last week's 'dovish hike' from the US FOMC is wending its way through markets, leading to several potential opportunities across asset classes says Kay Van-Petersen.


UK PM May's decision to invoke Article 50 on March 29 means Brexit negotiations are about to begin in earnest. Will reciprocal rights be served as a starter? Photo: Shutrerstock

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