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 / 23 January 2018 at 8:00 GMT

Morning Markets: Europe equities poised to gain as US govt. reopens

Senior Editor / Saxo Bank




  • Japan: Monetary Policy Decision meeting (already announced)
  • Germany: ZEW indicator of economic sentiment (10:00 GMT)
  • EU: FCCI Flash consumer confidence indicator (15:00 GMT)
  • US: API Weekly statistical bulletin (21:30 GMT)
  • Japan: Provisional trade statistics (23:50 GMT)

European equities are poised to open in positive territory after their counterparts on Wall St. and across Asia surged overnight on news that the US government is to reopen for business after Republicans bowed to Democratic pressure to debate immigration. But this back-to-work fix is only temporary and US politicians must still agree a deal on longer-term funding for the affairs of the nation. 

That said, the impact on equities was very substantial – the Nikkei 225 index in Tokyo powered beyond 24,000 for the first time in over 26 years, with real estate and precision machinery stocks leading the advance.

Meanwhile, the annual Davos get-together of the world's power-brokers gets underway today amid storms and avalanche warnings both of the real and metaphorical kind. It is still unclear whether US president Donald Trump will actually turn up at some stage during the week or whether he'll fashion an excuse to stay at home, away from cold temperatures and the chilly resentment of many of the other attendees.

Today's economic calendar is rather light and investors are still looking ahead to Thursday's European Central Bank meeting to resolve where EURUSD is going to advance further or correct.

Market signals

Asian session

  • The Bank of Japan left its policy settings unchanged
  • A Senate vote has provided a short-term fix to the US shutdown
  • The IMF upgraded its global growth forecast to 3.9% for this year at the WEF in Davos
  • The Trump tax cuts will help drive growth to its fastest pace in eight years: IMF
  • But IMF says US growth to slow after 2022, as the US reins in deficit and tax breaks expire
  • S Korea will complain to the WTO about 30% US tariff on solar panels, washing machines
  • Saudi Arabia signalled that Opec is willing to extend its production curbs beyond 2018
  • Asian stocks advanced after deal to end a three-day government shutdown
  • Japan's Nikkei 225 was 1.1% higher and the Hang Seng rose 1.3%
  • The Hang Seng is near the highest on record with its sixth straight advance.
  • The ASX rose 0.7% in strong energy stocks and South Korea's KOSPI added 1%
  • West Texas Intermediate crude climbed towards $64/b

Forex ahead

  • News of the Senate vote fix gave the US dollar a lift
  • The Australian dollar slipped just below 0.80
  • The Japanese yen rose 0.1% to 110.82 per dollar.
  • EURUSD was flat at $1.2254.
  • MXN and CAD traders will closely watch the Nafta talks beginning in Montreal today

From the Floor

Back to work. "The government shutdown has ended for now but the funding extension is only until February 8," Hardy.

Bull rule. "Equities seem unstoppable at the moment, there's increasing confidence among global investors," says Garnry.

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

In opinion

Oil-driven rebound
Energy stocks are in focus after crude snapped its recent losing streak, helped by signs from the Opec cartel it may extend its oil output curbs, says Saxo Capital Markets Australia

Coffee picks up

Coffee has rebounded amid reports of falling stockpiles for the soft commodity, says the Singapore-based team at Saxo APAC Sales Trading


Just four cities – Shanghai, Beijing, Guangzhou and sprawling Shenzhen, above – made up nearly an eighth of China's total GDP last year: South China Morning Post. Photo: Shutterstock

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