Morning Markets: Skittish stocks boost safe havens

Watchlist

• US September Retail Sales (1230 GMT)
• US October Flash U.Michigan Consumer Survey (1400 GMT)
• Federal Reserve chair Janet Yellen speaks (1730 GMT)
  

Markets were red on Wall Street and in Asia overnight as well as investors retreated to safe havens in the wake of yesterday's poor Chinese exports print and the consequent resumption of global slowdown fears. 

In Thailand, the long-serving king's death yesterday has heightened uncertainty as King Bhumibol's seven-decade reign was seen as a rare element of stability and continuity in a country regularly beset by pitched political battles. 

In Europe, core bond yields are beginning to head so low that certain notes are no longer eligible for purchase by the European Central Bank; according to Bloomberg, "the increasingly negative yields are raising questions about how much more the ECB can do in credit markets to stimulate growth". 

Brexit talks continue in earnest in the UK with the financial sector largely looking to move its London operations to a variety of Continental capitals as it now appears that few things can be taken for granted in this increasingly bitter divorce. 

Finally, today sees the US out with its latest retail sales data as well as a speech from Federal Reserve chair Janet Yellen that will have many investors combing her words for policy clues.

Market signals

Asian session

• Thailand has begun a year of mourning following the death of King Bhumibol
• The end of the seven-decade long reign heightens uncertainty in Thailand
  
• A rate cut in India looks likely, driven by lower-than-expected CPI data
  
• Deutsche Bank expects a 17% drop in the yuan by the end of 2018, on capital outflows
• The forecast follows this week's 0.8% slide in the Chinese currency
• China's grim export drop is tempting Beijing policymakers to let the yuan slide: Bloomberg
• China's producer prices rose 0.1% in September – the first rise since 2012
  
• Japan's PPI fell 3.2% year on year in line with expectations
• The Singaporean economy shrank 4.1% in Q3, leaving annual growth at just 0.6%
  
• The S&P/ASX 200 Index finished the day lower at 5434.0, and down 0.6% on the week
  
• Soft China trade data has hit copper prices, and miners
  
• Heavy falls for top miners weighed on the S&P/ASX200

Forex ahead

• USD heads back up through 104 handle on safe-haven buying
• The Australian dollar is edging closer to 0.76
  
• The Thai baht gained ground on hopes of a smooth transition after the king's death 
• The US dollar was worth 35.24 THB at at 0629 GMT
  
• The British pound fell to its lowest level against the AUD in three years 

From the Floor

GBPUSD options. “Volatility in cable has not traded lower despite the market being relatively calm since the flash-crash,” says Bechmann

Samsung’s woes. “Below the share price at 650, there is a football field of space there to the downside — it is not a buying opportunity,” says Garnry 

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

In  opinion

1..2..3
US retail may have picked up in September, but this key corner of the world's top economy seems locked into a post-financial era of sluggish growth at best, says Juhani Huopainen.

Packed a punch
Soft China trade data has had an impact on commodities, particularly metals, as well as bonds and investor sentiment, write Saxo's Singapore trading team.

Drilling down
BHP Billiton and Rio Tinto headed sharply lower at the start of trading on the ASX, after heavy falls in Europe for miners, says the team at Saxo Capital Markets (Australia).

The recent FOMC minutes showed a Fed that was deeply divided about whether or not to hike rates in September; what does that mean for December, wonders Neil Staines?

Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
Click here to make sure you're up to date with the latest developments.