Sterling has been blasted lower after BoE governor Carney cast doubt on a previously pretty-much-expected UK May rate hike. The EU's rejection of Britain's latest Brexit-Irish border plan only served to deepen the rot.
Article / 24 August 2016 at 7:00 GMT

Morning Markets: Housing for the hawks

Head of Editorial Content / Saxo Bank

Morning Markets


  • US: Existing Home Sales (1400 GMT)

While this week is focused heavily on Federal Reserve chair Janet Yellen's Friday speech at the Jackson Hole central bank summit, it would be a mistake to think that the data-dependent Fed will not adjust its prescriptions right up to the data on every new release.

Today's existing home sales print, then, will follow Tuesday's encouraging new home data and a good result is likely to add an upbeat demand dataset to the overall landscape. The new home release was likely particularly welcomed by hawks, as it showed the highest rate of new single-family home purchases since October 2007. 

Today's session sees crude oil in the spotlight again as Iran is reportedly considering measures to boost prices. Whether this amounts to anything given Tehran's desire for crude revenues in the wake of recently eased sanctions has yet to be seen, however.  

WTI crude oil (October future) currently sits at $47.35/barrel, very close to yesterday's European open level. 

Finally, the summoning of South African finance minister Pravin Gordhan by police saw USD spike versus the rand, while elsewhere in the EM space the Brazilian real continues to rally. 

In the majors, USDJPY sits around the 100.35 range as the JPY strength seen of late refuses to abate, even in the face of hawkish Fed speculation.

Market signals

Asian session

  • Construction work in Australia fell 3.7% in the June quarter, worse than expectations
  • Argentina has cut interest rates for the fourth week in a row
  • Qantas has posted a record $1.5 bn pre-tax profit 
  • Asian stocks climbed, led by shares in Tokyo
  • Turkey cuts interest rates; USDTRY gains 0.25%
  • South African finance minister faces legal issues, ZAR tumbles

Forex ahead

  • The Australian dollar ignored construction data to remain at 0.7613 
  • The USD inched 0.1% higher against the yen to 100.30 after falling overnight to 99.925
  • GBPUSD loses ground ahead of European open, fails to hold 1.32 area overnight
  • NZDUSD retraces much of central bank-spurred rally

From the Floor

Emerging worries. "There's plenty of pressure on EM currencies including a threatened Mexican downgrade," says Hardy.

Good foundation. "The US housing boom can still continue as mortgage rates have stabilised at decent levels," says Garnry.

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

In opinion

US home sales may deviate from the year’s bullish trend, writes James Picerno, but it would take a dramatic tumble to signal the virtuous cycle has run its course.

Rand reacts
The main mover in emerging markets was USDZAR, up 4% after South Africa's finance minister was summoned by police, writes the Saxo APAC Sales Trading team.

AUD ever-upwards
It's hard to see the Aussie reversing its upward trend soon, writes Max McKegg, with money markets pricing in further movement in the policy rate, perhaps to as low as 1%.

The Fed versus the dollar

US central bankers may have filled headlines with hawkish chatter of late, but none of this has had any real effect on the EURUSD rate, says Michael O'Neill.

New home sales

Will this week's US housing data attract the attention of Fed hawks? Photo: iStock

Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
Click here
to make sure you're up to date with the latest developments.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail