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Morning Call: Softer dollar boosts commodities, stocks

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.

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Article / 21 July 2017 at 7:00 GMT

Morning Markets: Moving forward with Greece

Clemens Bomsdorf

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Denmark

indices

Watchlist

Canada: CPI (1230 GMT)

The International Monetary Fund has finally agreed on a new, conditional €1.6 billion loan to troubled Greece. Eurozone countries have to join, and Greece must continue its reform programme to make the IMF pay out the sum. The aim is "to rebalance [the] budget toward more growth-friendly and socially-inclusive policies in the long run," the IMF said in a statement.

"As we have said many times, even with full programme implementation, Greece will not be able to restore debt sustainability and needs further debt relief from its European partners. A debt strategy anchored in more realistic assumptions needs to be agreed," IMF director Christine Lagarde said.

Elsewhere in Europe, Brexit negotiations between the European Union and the UK are moving slowly as the first full round of talks ended Thursday. The partners "offered few compromises", according to a Reuters report, which also said that "the pound fell on worries that British ministers were prepared to walk away without a deal."

The euro has broken into new territory above $1.1650, and the US dollar is hovering near 11-month lows.

The calendar is light on data today. Canadian CPI figures will be a first test whether inflation is really coming back as the Bank of Canada expects, which initiated a rate hike on July 12.

Market signals

Asian session

USD returned to its lowest in almost a year as investors assessed the Trump investigation
US profits season sees 83% of companies topping estimates on the bottom line
European Central Bank says tapering of its stimulus will be on the table this autumn
The euro surged after comments from the ECB's Mario Draghi
WTI crude was flat on Friday, trading at $46.91/b after losing 0.8% overnight
Gold was steady at $1,244.51 an ounce. It’s up for a second week
RBA deputy governor Guy Debelle dampened speculation of a rate rise soon

Forex ahead

The yen traded at 112.01 per dollar, a second week of gains for Japan’s currency
The euro held at $1.1627 after surging 1% on Thursday to a 23-month high
The Aussie dollar fell about 1% to as low as $0.7873 after RBA comments

In opinion

1...2...3
With a calendar looking empty today, Juhani Huopainen looks at the fallout from yesterday's ECB meeting, bond yields, EURUSD and the Dax.

Asian recoil
When Trump gets investigated, Asia seems to reel in horror, which is why equities got off to a weak start this morning, says Saxo Singapore's Asia team.

Euro firms
The euro firmed after the ECB left interest rates and its QE program unchanged on Thursday, and the euro has potential to strengthen further, says Peter Garnry in a video commentary.

ECB president Mario Draghi

ECB president Mario Draghi. Photo: screengrab from ECB webcast on July 20

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