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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 / 12 September 2017 at 7:00 GMT

Morning Markets: Irma cannot shake markets

Indices


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Shares in Asia hit another high after stocks in the US surged Monday. Market participants say the expected damage of hurricane Irma in the US is now seen smaller than earlier, which supported indices. 

On a global level, trade with North Korea is to be restricted further as the UN Security Council has unanimously decided to impose further sanctions on the dictator state. It can now longer export textiles and the supply of fuel to North Korea has been reduced. 

In Norway conservative prime minister Erna Solberg can stay in office after yesterday's election. Though the social democrats remained the largest party, their result was the weakest in more than 15 years. 

In Germany the automobile fair IAA will open its doors in Frankfurt today. Based in the country that houses some of the world's largest and most prestigious car makers such as Porsche, Volkswagen and BMW the show has always been one of the most important of its kind. This year it special, though. The so called Diesel scandal with car producers cheating on emissions tests has shed a dark light on big players, which are also under pressure to present alternative fuel solutions. Tesla, the most famous of the electric car makers, will not be present with a booth at the fair.  

Another important company event, obviously, is the upcoming Apple keynote at 1000 PDT.

Market signals

Asian session

  • Tensions with North Korea eased and Hurricane Irma caused less destruction than feared
  • UN Security Council approved new North Korea sanctions after US dropped key demands
  • Australian business conditions rose to their highest since early 2008
  • But NAB's monthly survey also showed confidence took a big hit to two-year lows
  • UBS says Australian banks are vastly underestimating the risks of a housing collapse
  • The yield on 10-year Treasuries held at 2.13% after rising by 8bps on Monday.
  • Gold fell 0.3% to $1,323.96/oz after sinking 1.4% on Monday
  • WTI crude lost 0.2% to $48 following a 1.2% gain on Monday
  • The MSCI's Asia-Pacific shares outside Japan were at highest level since 2007
  • The Nikkei was the strongest bourse in Asia, up 1.2% at 0520 GMT
  • The Hang Seng was flat, and the ASX staged a relief rally, up 0.61% at 0547 GMT

Forex ahead

  • As the USD recovered overnight, the EUR fell back below $1.20
  • EURUSD was steady in Asia trading at around $1.1953.
  • AUD lost ground against the stronger US dollar but is still above 0.80
  • The USD lost some of its overnight gain against the yen
  • JPY was at 109.38 to the USD after sinking 1.4% on Monday

From the Floor

Heading. “The ECB is clearly going nowhere in policy,” says Hardy

Chances. “We expect continued risk-on,” says Garnry

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

In opinion

Silver lining?
Some of the destruction wrought by hurricanes Harvey and Irma could turn out to be creative destruction, writes Kay Van-Petersen.

Relief rally
Asian markets climbed as global fears receded over Hurricane Irma and North Korea, writes the Saxo APAC Sales Trading team.

Mood lifts
The local market was up 0.4% in early trade and the Australian dollar was down against the USD but still above 0.80, writes the team at Saxo Capital Markets (Australia).


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