Article / 26 May 2017 at 7:00 GMT

Morning Markets: Oil sinks further in Asian session

Consulting editor / TradingFloor
Norway







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Watchlist

  • Japan: CPI (published)
  • US April durable goods orders (1230 GMT)
  • US Q1 GDP 2nd estimate (1230 GMT)
  • US May U. Michigan consumer sentiment survey (1400 GMT)


Oil prices extended losses in Friday's Asian session after dropping sharply on Thursday due to disappointment over Opec's deal to extend production cuts. The oil producers' cartel agreed to extend the cuts to March next year, but failed to agree on a deeper curtailment that some in the market had speculated on.

Major currencies eased, and the US dollar firmed during morning trade in Asia.

Asian stocks were mixed on Friday as the overnight drop in oil prices offset positive sentiment around a record high for the S&P 500 index.

Wall Street stocks climbed on Thursday with help from dovish FOMC minutes published Wednesday.

Market signals

Asian session

  • Japan's national core CPI rose 0.3% year-on-year in April, missing estimates
  • Tokyo's national core CPI returned to growth in May, up 0.1% y/y
  • Japan's Services Producer Price Index was up 0.7% in May
  • Oil prices fell 5% as the extension of output curbs by Opec disappointed 
  • Oil weighed on energy shares as most Asian equity markets headed lower
  • Commodity currencies retreated, and the onshore yuan headed higher
  • WTI crude fell 1% to $48.42/b, after sinking 4.8% in the previous session
  • Gold rose 0.1% in Asian time to $1,257.39/oz
  • The yield on 10-year Treasury notes fell one basis point to 2.25%
  • The Nikkei 225 was down 0.33% at 0500 GMT
  • The Hang Seng was steady at 0505 GMT, with Shanghai just 0.07% higher
  • South Korea's KOSPI was Asia's best performer, up 0.56% at 0519 GMT
  • The ASX/S&P 200 was hit hardest, down 0>61% at 0520 GMT

Forex ahead

  • The AUD fell 0.4% in Asian time, after losing 0.7% on Thursday
  • JPY rose 0.3% to 111.57 per dollar, after dropping 0.3% on Thursday
  • The onshore yuan gained 0.2%, taking its weekly advance to 0.4%
  • GBPUSD slid 0.4% to $1.2888


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

In opinion

1..2..3
The second estimate of the US first-quarter GDP growth is not expected to change a lot and merely confirm that the start of 2017 was slow, writes Juhani Huopainen.

Copper concerns
Copper-supply threats are back on investor radars as rising labour tensions at the world’s second-largest mine helped push up prices that had been beaten down by demand concerns, explains Saxo's Sydney trading team.

Spending hit
Economists believe the UK's sharp spike in inflation, due to the slump in the pound, is hitting disposable incomes and deterring spending, say Saxo's Singapore trading team.


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2y
Vity Vity
housewives in the UK are beginning to feel the pinch with the rise in inflation, deferring spending may not be a viable option.

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