Morning Markets: Nikkei hits 21-year high, GBP volatile — #SaxoStrats
- China: Imports, exports and trade balance (0359 GMT)
- Germany: CPI (0600 GMT)
- US: CPI (1230 GMT)
- US: University of Michigan consumer sentiment (1400 GMT)
- Japan: Foreign Investment (2350 GMT)
Asian markets climbed yet higher overnight, building on 10-year highs in a development that Saxo Bank head of equity strategy Peter Garnry says could place some companies at risk of massive pullbacks if their earnings releases disappoint.
Australian stocks rose on gains in the materials sector while Japanese steelmaker Kobe Steel slipped 8.5% as the firm's data falsification scandal widened. Overall, however, Friday's trade saw the Nikkei spike above 21,000 for the first time since 1996.
Thursday's mid-session sterling rout was met with some bid action despite London's near-total lack of headway on Brexit talks and a widespread perception of disarray at the top of the Conservative Party. GBP gained further ground overnight to 1.3303 after slipping to the 1.3213 level in Thursday's US session on a period of whipsaw volatility.
Today sees the US release its latest inflation data; the dollar index trended mildly lower overnight while the 10-year Treasury yield slipped by two basis points. Also on tap are the latest University of Michigan sentiment survey at 1400 GMT and Bank of America earnings at 1559 GMT.
European shares are expected to open in the red today with the FTSE expected to start trading 23 points down at 7,533, while the German Dax is seen five points lower at 12,978. Volatility surrounding the Catalan constitutional crisis remains elevated in the wake of Thursday's clash between from-Spanish unity and separatist protesters in Barcelona's Plaza de Catalunya.
- Falls on Wall Street weighed on sentiment in some Asian markets
- Miners helped drive the ASX200 higher; it closed up 0.34% at 5,814
- China's exports rose 9% in September in yuan terms; imports increased 19.5%
- This gave China a trade surplus of 193 billion yuan
- The release of the FOMC minutes gave gold prices a lift
- Iron ore prices have recovered slightly, but uncertainty over demand from China remains
- Copper prices have hit a five-week high on robust demand from China
- Singapore's GDP reached an annualised 6.3% in Q3
- Anxiety over Catalonia is weighing on the euro, and sentiment in EU markets
- Bitcoin was fetching $5,452 on Friday afternoon, up 75% in under 30 days
- The Aussie dollar rebounded on USD weakness; it was 78.38¢ in late Asian trade
- The USD steadied in early Asian trading as investors awaited US inflation data
- Cable breaks north of key 1.33 area into the European open
From the Floor
Blowing in the wind. “USD is wobbly ahead of hurricane-affected US CPI and retail sales data,” says Hardy
Dollar impact. “Gold is challenging resistance at $1297.50 on the weaker dollar and lower yields,” says Hansen
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
The IEA says surging output from US shale fields and elsewhere will frustrate efforts by Opec and other top producers to curb the oil glut, says Saxo Capital Markets Australia.
The Elliott Wave structure for EURUSD promises much support today around 1.1800, or the mid 1.1700s with today's upside target at 1.1910/1.1940, says Max McKegg.
Thursday saw GBPUSD head below 1.32 before buyers stepped in to drive the troubled currency towards the 1.33 level versus USD overnight, says John J Hardy.
the back of an export boom. Photo: Shutterstock
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