Article / 13 February 2018 at 8:00 GMT

Morning Markets: Optimism returns to equities (for now)

Senior Editor / Saxo Bank




  • UK: Monthly inflation (0930 GMT)
  • UK: Producer prices (0930 GMT)
  • US: US API Weekly Statistical Bulletin (2130 GMT)
  • Japan: Preliminary quarterly GDP estimate (2350 GMT)

Optimism was back in fashion in Asia today, with stock indices heading into positive territory across much of the region on the back of gains on Wall St. Leading miners did much of the lifting for Australia's S&P/ASX200. Japan initially joined the regional rebound party after taking a day off on Monday but subsequently retraced its gains and both the Nikkei and the Topix closed lower. Meanwhile share markets in China and Hong Kong will getting ready to take a lengthy break when the Lunar New Year kicks off later this week.

Meanwhile, optimism is evident in South Africa too after the country's ruling ANC party decided after a marathon 13-hour meeting to force President Zuma to resign, opening the way for Cyril Ramaphosa to succeed him. The South African rand is being supported by this news and the prospect that a new president would move against the corruption and graft that characterises the country's politics and would usher in reforms to help the beleaguered economy back on track. However, although the ZAR could rally further from here the overall nervous market backdrop means any gains could be temporary.

Market signals

Asian session

  • Gains on Wall St and in Europe gave share investor sentiment a lift in Asia
  • Apple led a tech rally with a 4% gain
  • Japan's Nikkei 225 rebounded before retreating in late trade
  • Leading Australian miners helped drive the S&P/ASX200 into positive territory
  • The ASX200 closed near the highs of the day, up 0.6% at 5856
  • An Australian business and confidence conditions index jumped 6 points to 19 points
  • The NAB survey results are well above the long-run average of 5 index points
  • BoJ's Governor said that the BoJ must maintain its large-scale monetary easing stance
  • BHP said it will record a $1.8bn income tax expense due to cuts in the US tax rate
  • The ANC decided to remove Jacob Zuma as South African president
  • China's stock markets will close from February 15 to 21 for the Lunar New Year
  • Hong Kong's stock market will close too, but only from February 16 to 19

Forex ahead

  • The Australian dollar was steady after the release of the NAB business conditions index
  • AUDUSD was trading at 78.70¢ at 0600 GMT
  • The USD retreated as global markets showed signs of stability
  • US CPI data due out tomorrow is likely to impact the USD and other major currencies

From the Floor

Asian nerves "All eyes on the yen crosses and USDJPY in particular," says Hardy.

Thin red line "Watch the Nikkei as 21,000 is a critical level," says Garnry.

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

In opinion

US revival
There's a feeling of back to normal in the air as US equities see the light of day, but savvy investors are preparing for more volatility ahead, says Michael O'Neill.

Turnaround tactics
The ASX can't just rely on a US turnaround to make a decision to go upwards; it needs commodities to do the same, says Saxo Capital Markets Australia.

Red metal boost
Copper has gained ground on US dollar weakness and an expected demand boost from Donald Trump's infrastructure spending plans, says the team at Saxo APAC Sales Trading.


Shares rebounded in Japan today following the Foundation Day holiday on Monday, but then fell back. Later this week it will be China's turn to take time off for the Lunar New Year.
Photo: Shutterstock

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