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 / 19 February 2018 at 8:16 GMT

Morning Markets: Mixed signals in holiday-damped trade

Senior Editor / Saxo Bank




  • Japan: Provisional monthly trade statistics (already released)
  • Switzerland: Trade balance (07:00 GMT)
  • Sweden: CPI (08:30 GMT)
  • Switzerland: Trade balance (07:00 GMT)
  • Germany: ZEW Indicator of Economic Sentiment (10:00 GMT)

There's a protectionist theme to Morning Markets today, with the US tempted to curb its steel and aluminium glut by slapping tariffs on Chinese and Russian imports, and Brexit fears costing manufacturing jobs in the UK. Meanwhile, Asia's number two economy, Japan, slipped into a trade deficit last month. While both exports and imports registered strong growth, the increase in Japan's imports resulted in the country's first monthly trade deficit since May 2017.

Elsewhere, the US dollar is staging a recovery of sorts, with marginal gains against the euro, sterling and the yen and a very slight advance by the dollar index, which measures the greenback against a basket of its peers. This followed last week's slump which saw the dollar weaken to almost its lowest level in three years.

But as always in markets, one asset's pain is another's gain, an commodities, including crude oil and gold,  are continuing to draw support from the dollar's weakness. Oil is also being supported by heightened geopolitical risks following a fiery speech by Israel's prime minister warning Iran against "testing its resolve".

With most of Asia and the United States closed for various holidays, it's shaping up to be a quiet start to the week though Germany's ZEW Indicator of economic sentiment ( due at 10:00 GMT), will, as ever, attract market attention.

Market signals

Asian session

  • Trading was subdued in much of Asia today, due to the Lunar New Year holiday

  • But Asian markets mostly rose after Wall St extended its winning streak to six days

  • The S&P/ASX 200 index ended the day up 37 points, or 0.6%, at 5941

  • Japan's Nikkei 225 rose 1.2% while the Kospi index was up 0.7%

  • Wall St is closed for the President's Day public holiday
  • Japan’s trade recovery powered into 2018 as exports and imports registered strong growth
  • The increase in Japan's imports resulted in the first monthly trade deficit since May 2017
  • Growth in NZ's services sector eased in January and new orders fell to a 10-month low
  • US bureaucrats want to slap duties on steel and aluminium products from China, Russia
  • Beijing has warned it will retaliate against any US tariffs on metals
  • The US has rejected a Chinese investor-led bid for the Chicago Stock Exchange
  • Fears of lost access to the EU after Brexit has hit UK car makers and jobs

Forex ahead

  • The US dollar found some traction today following last week’s steep fall 
  • The fragile Australian dollar has slipped back below US80¢

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

In opinion

Slow start
With the US closed on Monday and China and Hong Kong markets also enjoying a holiday, how will the ASX survive without an exterior cue, asks Saxo Capital Markets Australia.

FOMC watch
Wednesday's Federal Open Market Committee minutes could hint at an accelerated pace of rate hikes, and trigger USD buying interest, says Saxo APAC Sales Trading.

Macro outlook
While much of Asia takes a break, Saxo Bank's global macro strategist Kay Van-Petersen and his team consider the outlook for FX, commodities, bonds and equities in the coming week.


Shares in US Steel Corporation soared on speculation that the US will slap hefty duties on its metals imports; Beijing says it will retaliate against such move. Photo: Shutterstock

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