Article / 03 May 2017 at 7:00 GMT

Morning Markets: Europe getting tough on Brexit?

Head of Editorial Content / Saxo Bank

Morning Markets


  • Germany: Labour market statistics, incl. unemployment (0800 GMT)
  • Eurozone: Q1 GDP (0900 GMT)
  • EU: PPI (0900 GMT)
  • US: ADP National employment report (1215 GMT)
  • US: ISM non-manufacturing report on business (1400 GMT)
  • US: EIA Weekly petroleum status report, incl. crude oil and gasoline stocks (1430 GMT)
  • US: FOMC interest rate decision (1800 GMT)

Today marks the conclusion of the US Federal Open Market Committee's latest two-day policy meeting at which the Fed is expected to hold rates steady; Bloomberg's estimates put the chances of a hike at 12.8%. 

The FOMC decision comes in the wake of last Friday's weaker-than-expected March GDP print and ahead of Friday's nonfarm payrolls release, so investors will be looking to gauge the central bank's response to both the reality and perception of flagging data stateside. 

Asian markets were mixed today with Taiwan's Taiex index rising while the Shanghai Composite traded into the red after an early-morning rally. Markets in Hong Kong, Japan, and South Korea were closed for public holidays. 

European markets are expected to follow the trend with spreadbetters expecting slight Dax gains and FTSE weakness. 

In New York, Apple shares declined by over 2% after hours as the firm reported a revenue shortfall ($ versus $53.02bn expected by consensus), but the result was not wholly negative for the tech giant as adjusted earnings-per-share came in at $2.10 versus $2.02 expected. According to CEO Tim Cook, "reports of future products" – i.e. the iPhone 8 – likely weighed on quarterly shipments of the firm's flagship product.

A new analysis from the Financial Times claims that the European Union has "raised its opening demand for Britain’s Brexit bill to an upfront gross payment of up to €100 billion" on the back of new and stricter demands from France and Germany. 

The shift upwards from previous estimates of €60bn represents a hardening of the Franco-German stance, says the FT, with the likely election of Emmanuel Macron on May 7 pointing to a reaffirmation of the Franco-German alliance at the EU's heart and thus perhaps a harder line on Brexit. 

The pound tumbled by over 50 pips versus the dollar overnight as fears of a more difficult Brexit process hitting the British currency through the Asian session.

Market signals

Asian session

  • NZ unemployment fell to 4.9% in the March quarter (down from 5.2% in the prior one)
  • Australia's services sector expanded to 53 points in April (from 51.7 in March)
  • Bitcoin surged to a record high above $1,400 on Tuesday
  • The Nasdaq hit an intraday record of 6,102 and eked out a closing record
  • Apple reported a surprise fall in iPhone sales for its second quarter
  • Oil prices retraced some losses in Asian trade
  • China's manufacturing PMI slowed to just 50.3 in April, below expected 51.0
  • The Tokyo Stock Exchange was closed for a public holiday

Forex ahead

  • GBPUSD plunged from nearly 1,2950 to below 1.2890 on renewed Brexit fears
  • EURUSD heading lower towards 1.09 handle into European bell
  • EURGBP posts pre-opening high of 0.08476
  • USDJPY retakes 112.00 overnight, holding the handle into Europe's open

From the Floor

Disappointing.It seems like [Apple] customers are holding back — they are waiting for that iPhone 8,” says Garnry.

Volatile oil.We had a very volatile end of the day yesterday in the crude oil markets,” says Hansen.

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

In opinion

1... 2... 3
The Eurozone's first-quarter growth is forecast to remain unchanged from the previous quarter at 0.5%, writes James Picerno.

Governing blues
Emmanuel Macron is tipped to win France's presidential election on May 7, but June's legislative vote will determine the shape of the new government, says Christopher Dembik.

HG copper supported
Risk of additional supply disruptions for high-grade copper on top of those already seen should counter any risk of slowing demand and keep the metal supported, writes Ole Hansen.

Rebound awaited
Economists expect Friday's US jobs report to show a sharp rebound in nonfarm payrolls in April after a surprise slump in March, writes John Acher.


A rainy day for pound traders as a new FT analysis points to a 

renewed toughness from the EU on Brexit. Photo: Shutterstock

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