Article / 14 September 2016 at 7:00 GMT

Morning Markets: Risk aversion the name of the game




  • UK: Labour Market Report (0830 GMT)
  • Eurozone: Industrial Production (0900 GMT)
  • Ireland: GDP (1000 GMT)
  • Eurozone: ECB's Nowotny speaking in Vienna (1000 GMT)
  • US: Weekly Petroleum Status Report (1630 GMT)

European equity markets are set to open in negative territory Wednesday after the oil-inspired wave or risk aversion that erupted in Wall Street yesterday washed into Asia overnight, sending most local indices into lower ground.

News that both Opec and the International Energy Agency expect the crude glut to persist well into 2017 is keeping the black stuff pinned in a tight range as the market looks nervously ahead to the weekly status report out of the US at 1630 GMT. Forecasts here are for a rise of 2.8 million barrels after last week's 14.5m/b decline in stocks.

Noteworthy items on the economic calendar include the UK's labour market report which investors will scan for evidence of any deterioration in the wake of Britain's decision to opt out of the EU. Co-incidentally, Ireland is also due to report GDP numbers today amid reports from Britain's neighbouring isle of job losses in the food industry which sources say are a direct consequence of Brexit.

Finally today, good news for Monsanto shareholders: the FT reports that drug company Bayer is close to sealing its deal to buy the US seed maker, having sweetened its price to nearly $130 a share to a total of $66bn, making this the biggest buyout so far this year.

Market signals

Asian session

  • Asian markets were hit early, tracking US losses, higher volatility and lower oil prices 
  • The MSCI Asia Pacific Index had fallen 0.5% as of 1315 Tokyo time 
  • Australian consumer confidence rose by 0.3% over month to be up 8% over year
  • Oil recouped some of the last session’s loss to trade around $45.12/barrel
  • Asian stocks, currencies and bonds extended losses into afternoon trading
  • Ten-year bond yields in Australia and New Zealand climbed at least six basis points
  • In Australia they were at at 2.13% and in New Zealand 2.56%
  • At 0516 GMT, the Nikkei 225 was down 0.41% at 16,661
  • The Hang Seng had risen 0.16% at 0519 GMT but Shanghai had slumped 0.52%
  • The Mumbai Sensex was down 0.17% at 0519 GMT
  • The ASX/S&P 200 had risen 0.34% at 0544 GMT at 5225 points

Forex ahead

  • Malaysia’s ringgit led declines among regional currencies, slipping 0.5%
  • The JPY was also weaker against the USD, around 0.4% lower in mid session trade
  • At 0500 GMT USDJPY was trading at 102.95
  • The Australia’s dollar advanced 0.3% as commodities prices stabilised
  • Aussie was trading at around US74.8c at 0500 GMT

In opinion


UK employment appears robust post Brexit, while Europe's manufacturing remains in the doldrums - an expected narrative after the UK exited Europe, says James Picerno

Oil glut fears
The global risk-off which started with the Asia currencies continued overnight following the IEA report on oil, writes the team at Saxo APAC Sales Trading

ASX rocks and rolls
The ASX showed its directionless credentials early today - in the course of the first hour of trading it moved up and down twice, reports Saxo Capital Markets in Sydney


 Oil industry misery is set to continue. Pic: iStock

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