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The euro jumped after minutes of the European Central Bank's December meeting on Thursday paved the way for a shift in forward guidance early in 2018. Meanwhile, gold is showing resilience, defying calls for a correction.
Article / 03 January 2018 at 8:54 GMT

Morning Markets: Oil rally and weak dollar boost equities

Senior Editor / Saxo Bank
Denmark

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Watchlist

  • DE: Labour market statistics (0900 GMT)
  • US: ISM Manufacturing report (1500 GMT)
  • US: FOMC meeting minutes and economic forecasts (1900 GMT)

Commodity shares, in line with crude oil and metals prices, gained ground overnight on the back of Tuesday's strong Caixin numbers as well as bullish signals from the US manufacturing sector.

All this is happening on the back of a weak US dollar, which remains depressed by the fiscal implications of Trump's tax reform. 

Looking ahead, the most important items on the economic calendar are minutes from the FOMC meeting and an ISM manufacturing index, but neither is expected to provide any surprises.

Market signals

Asian session

  • Strong manufacturing data and overnight gains on Wall Street gave Asian markets a boost 
  • It's a bank holiday in Japan today
  • US markets started the year with a strong start; the S&P and Nasdaq hit closing highs
  • A proposed merger between MoneyGram International and Ant Financial fell through 
  • In a tweet, US President Donald Trump threatened to withhold funding to Palestinians
  • The US warned North Korea against another missile test
  • The Shanghai Composite Index had risen 0.6% in mid afternoon trading
  • The ASX/S&P 200 closed slightly up at 6070, and New Zealand was also up 0.3%
  • WTI crude was steady in later trading at around $60.40/barrel.
  • Brent crude futures were trading 3 cents lower at $66.54/b
  • Gold fell slightly to $1,315.35/oz, its first decline in just over a week

Forex ahead

  • EURUSD traded at $1.2058, near a three-year high. 
  • The yen was steady at 112.28 per dollar 
  • AUDUSD declined 0.1% to 78.21 U.S. cents
  • GBPUSD rose slightly to 1.3608 per dollar 

From the Floor

Greenback blues. "EURUSD is poised just below cycle highs and cable is also near cycle highs despite a lack of news" says Hardy

Equity strength. "The market is still gaining but we still expect it to weaken towards end of Q1" says Garnry

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

In opinion

Fuelling concerns
Oil prices continued to be supported by concerns about Iran demonstrations and the freezing cold temperatures across northern US and Canada, writes Michael O'Neill.


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A clash between Seoul and Tokyo over the issue of comfort women could
throw Asian geopolitics into disarray. Photo: Shutterstock

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03 January
Daniel CN Daniel CN
Do you keep the 25USD/barrel target for 2018?
03 January
Dance like nobody's watching Dance like nobody's watching
Daniel, Do you really have confidence in this calls? It comes to me hyper good contrarian trades, especially if the trades are recommended by respected economists.
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