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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 / 01 February 2018 at 8:00 GMT

Morning Markets: Fed holds the line

Head of Editorial Content / Saxo Bank
Denmark

Morning Markets


Watchlist

  • France: Manufacturing PMI (0850 GMT)
  • Germany: Manufacturing PMI (0855 GMT)
  • Eurozone: Manufacturing PMI (0900 GMT)
  • US: ISM manufacturing report (1500 GMT)

Financial shares in Japan and Australia posted gains overnight on the Federal Open Market Committee's decision to stay the course on interest rates, but equities in Hong Kong and on the Chinese mainland did not follow suit.

As expected, the US central bank did not move the needle on policy but told markets that inflation appears likely to rise.

Wednesday's trade was overall muted after the surprise outbreak of risk-off sentiment Tuesday into President Trump's first State of the Union address.

Today sees France and Germany reporting manufacturing PMI data at 08:50 and 08:55 GMT respectively.

Market signals

Asian session

  • US stocks closed slightly up after the Fed kept rates unchanged but flagged a March rise
  • It was Janet Yellen's last meeting at the helm of the Federal Reserve 
  • Japan's final Manufacturing PMI came in at 54.8 in January, up slightly on last month
  • The Nikkei 225 made solid gains; closing up by a hefty 1.68%
  • China's Caixin manufacturing PMI for January came in at 51.5, better than expected
  • China's benchmark Shanghai Composite fell on earnings concerns
  • Hong Kong's Hang Seng retreated as well, closing down 0.39%
  • India's IHS Markit Manufacturing PMI slowed to 52.4, a three-month low, in January
  • The S&P/ASX200 surged higher; it closed up 0.87% at 6,090.10
  • Australian building approvals for month fell 20% ( a 7.6% fall had been expected)
  • Aussie year-on-year building approvals fell 5.5% (well below the expected 11.5% rise)

Forex ahead

  • The US dollar held overnight gains against the yen
  • AUD has lost ground on weak CPI, USD strength
  • EURUSD has declined from Wednesday's highs

From the Floor

US production on the rise. "The oil rally is losing momentum," says Hansen.

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

In opinion

Precious potential
The precious metal Palladium has shown weakness so far this year, in contrast to its bullish rise last year, writes the team at Saxo Capital Markets (Australia).

China's upbeat PMI
China's Caixin Manufacturing PMI for small to mid-size firms, came in at 51.5 in January, beating expectations, says the Singapore-based team at Saxo APAC Sales Trading.

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 Lujiazui financial district, Shanghai ... the Shanghai Composite index retreated on worries that corporate earnings may fall short of expectations. Caption. Photo: Shutterstock

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