Article / 18 May 2017 at 7:00 GMT

Morning Markets: Investors flee from Washington unrest

Head of Editorial Content / Saxo Bank

Morning Markets


  • UK: Retail Sales (0830 GMT) 
  • US: Philadelphia Fed Manufacturing Index (1230 GMT)

US president Donald Trump's Washington woes have well and truly gone global with Asian equity markets retreating overnight and European indices set to open lower. The political instability, which relates tangentially to long-standing accusations of Russian meddling and more directly to a lack of political allies, has resulted in a safe-haven bid and a widespread pullback in risk sentiment. 

The S&P 500 endured its largest one-day decline in eight months on the back of charges that Trump tried to interfere in an ongoing FBI investigation while gold held onto Wednesday's 2% gain.

The latest oil inventories data from the US showed a 1.8 million barrel decline that helped to fuel the recovery in crude.

Today sees the UK release its latest retail sales data at 0830 GMT, which many see as a key bellwether for the country's economic recovery in light of the recent bullish inflation print.

Market signals

Asian session

  • Japan's GDP expanded 0.5% in the first quarter and 2.2% annually
  • Australia's inflationary expectations fell slightly in May to 4% from 4.1% in April
  • Its unemployment rate fell to 5.7% in April, beating expectations of a flat rate of 5.9%
  • Former FBI Director Robert Mueller to investigate possible Trump-Russia collusion
  • Gold was flat at $1,261.48/ox after a big one day rally on Wednesday
  • The MSCI Asia Pacific Index slid 0.8% the most since April 6, in mid Tokyo trading
  • Japan's Nikkei 225 had shed 1.38% at 0521 GMT
  • Asian bourses were all hit with the S&P/ASX 200 down 1.05% and Kospi lost 0.42%
  • Hong Kong’s Hang Seng Index fell 0.24% and Shanghai down 0.3%
  • WTI Crude fell 0.2% to $48.96/b, after jumping 0.8% in the previous session
  • Brent crude slipped 0.25% to $52.08/b

Forex ahead

  • The US dollar sank on the turmoil in Washington
  • AUDUSD rebounded to 0.7448 as the jobs data beat estimates
  • JPY fell 0.2% to 110.99 per dollar before recovering into the European bell
  • The EUR was flat at $1.1127, after four straight days of gains

From the Floor

Trump's reality show. "Really we are sitting here watching the political developments in the US more than anything else," says Hardy. 

Stocks hit. "Global equities are sharply lower, and this is reinforced by high turnover," says Moltke-Leth.

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

In opinion

Consumer spending in the UK has hit a soft patch recently, but relief is expected in today’s April update, writes James Picerno.

Driver's seat
The US 10-years have become the prime mover behind EURUSD and USDJPY with the bond market taking its cue from rate-hike expectations. Max McKegg shows how to calculate the probability of such moves.

Sea of red
The Australian market followed overseas leads and opened in the red, with financials and miners the hardest hit, say the team at Saxo Capital Markets (Australia).

Far off troubles

Asian equities markets have followed their US counterparts wobbling in sync with the troubles of a far-off president, says the Saxo Singapore team

Donald Trump

The embattled Trump administration is feeding perceptions of instability 
at the US' institutional core. Photo: Shutterstock

Morning Markets goes out on the TradingFloor platform at 07:00 GMT, Monday to Friday.
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