Article / 07 February 2017 at 8:01 GMT

Morning Markets: Rush to safe havens amid global uncertainty

Consultant editor



  • Germany: Industrial Production (0700 GMT)
  • US: Job Openings & Labor Turnover Survey (1500 GMT)

With the situation on both sides of the Atlantic looking ever more precarious, safe-haven gold has reached $1,233/oz, a high not seen since the immediate aftermath of the US elections.

US investors who had been bullish on Donald Trump’s presidency are now beginning to err on the side of caution as the White House’s flailing attempts to enforce its travel ban are repeatedly thwarted by the judiciary; suggesting that the president’s ability to keep his campaign promises may not be as simple as him staying true to his already fluid words.

Overnight, all three major US indices finished below their previous day’s closes after US stocks traded weakly amid growing concerns and uncertainty over Trump’s “America First” stance. The uncertainty was further reflected the dollar’s weakness against the yen – USDJPY yesterday fell below the 112 mark for the first time since late November, only just crossing back over the line as European markets opened this morning.

The fear is that Trump’s protectionist policies could see a reduction in US consumption while weakening the currencies of America’s trade partners in the fashion of the Mexican peso.

On Monday, European Central Bank president Mario Draghi hit back at the Trump administration’s accusation that the euro had been “grossly undervalued” in order to allow Germany to exploit the US and its fellow EU member states.

“We are not currency manipulators,” Draghi told the European Parliament, where he reiterated his stance that leaving the euro is not an option.

His remarks came in response to French presidential hopeful Marine Le Pen’s promise that, if elected, her far-right Front National would pull France out of the common currency.

The spectre of a “Frexit” situation – and therefore the potential for the disintegration of the European Union – has become more pronounced in recent days. Le Pen’s main rival, former prime minister Francois Fillon, has been digging in his heels over allegations he illicitly funnelled almost €1 billion of state funds to his wife over the course of several years.

The scandal has seen conservative Fillon lose nearly three percentage points in the polls over the last week, with just 18.5% of polled French saying he has their vote; versus Le Pen who has gained 1.5 percentage points and maintaining pole position with 25.5% declaring their support for her.

The uncertainty in France has seen French/German 10-year bond spreads at their widest since 2012. Meanwhile, the Frankfurt and London stock exchanges both closed lower yesterday amid the anti-EU rumblings in France and the growing wariness of Trump’s capricious presidency. 

Market signals

Asian session

  • Asian markets traded lower amid global risk-off sentiment
  • The ASX200 fell well below the 5600 support level
  • Japan's Nikkei 225 lost 0.2% on the back of yen strength
  • The gold price shot to a three-month high
  • The Reserve Bank of Australia kept the cash rate on hold, as expected
  • NZ central bank governor Graeme Wheeler will step down when his term ends in Sep

Forex ahead

  • The AUD jumped 0.4% to 0.7672 US cents after the rates decision
  • The yen traded strongly as a safe-haven currency, worth 111.68 per dollar in morning trade
  • The euro fetched 120.145 yen, near a two-month low of 119.975 set overnight

From the Floor

Risk-off in Europe. “We see a high risk of further spread widening and volatility in the bond market,” says Fasdal

Oil rangebound. "The market has been trading sideways for a few months, and to me that is a dangerous signal," says Hansen 

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

In opinion


Every time we hear about EUR political wobbles, the Germans seem to come to the rescue, revealing their industrial strength, says James Picerno.

Tale of two trades

The ASX saw one up and one down this morning - Macquarie's Q3 earnings sparked a selloff, while Transurban's earnings saw it soar, as Saxo Capital Markets reports.

French for fear
Jitters over the French elections hit the EUR and the bias is for it to go lower, writes the team at Saxo APAC Sales Trading.

Wake-up call
The widening of peripheral spreads is evidence at last that Europe is waking up to the existential threat posed by the likes of Marine Le Pen. The euro implications are clear, says John J Hardy.

Le Pen's opportunity
France chooses its next president this Spring and with Francois Fillon's campaign in disarray, Marine Le Pen could be poised to take advantage, writes Christopher Dembik.

Markets may be hanging on every word coming from the mouth/tweet of president Donald Trump, but nothing ever stays quite the same, and James Kim gives his top tips for the week.

 Marine Le Pen can quite possibly sense an unlikely presidential victory. Photo: Shutterstock

Morning Markets goes out on the TradingFloor platform at 0800 GMT, Monday to Friday.
Click here
to make sure you're up to date with the latest developments.

helicongrowth helicongrowth
$ up and gold up over last few sessions = risk off sentiment growing


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail