Article / 01 August 2016 at 7:00 GMT

Morning Markets: Soft Chinese data and the open society

Head of Editorial Content / Saxo Bank

Morning Markets: Prices


  • Brazil: Manufacturing PMI (1300 GMT)
  • US: Construction Spending (1400 GMT) 
  • US: ISM Manufacturing Index (1400 GMT)

After the traditionally high-demand summer months draw to an end, the global oil glut is back at the forefront of traders' minds with Bloomberg reporting that "there's nowhere to go but down". Also back in the spotlight is the Chinese slowdown as that country's Manufacturing PMI for July slid into negative territory for the first time since February.

Stepping back for an even broader view, The Economist is out with a forceful new cover story that calls the US election "the gravest risk to the free world since communism" as forces of "anti-globalism take aim at the post-World War Two consensus behind Republican presidential candidate Donald Trump.

The question remains how much economic expansion policymaking globalists require before their populations grow restive and inclined to nationalist poilicies. While globalists can point to the all-time highs reached by the S&P 500 as support for the world order they claim has "brought about the greatest poverty reduction in history," investors suspicious of the current order's strength can point to gold's near-30% rise this year, the oil glut, soft data from the world's developed economies, and a steady stream of central bank stimulus as signs that the present order is running on fumes.

In Saxo Bank chief economist Steen Jakobsen's view, it is not globalisation or openness that is to blame, but rather the profound unwillingness of political elites to enact large-scale reforms

The Economists's favoured order draws its legitimacy from its openness/pluralism on the ideological level, but from its wealth on the economic one. As we head towards the US ballot in November, and as the UK continues to navigate its path out of the European Union, we will note that, like the Federal Reserve, the current ideological regime has grown deeply data-dependent.

This week's nonfarm payrolls release will be one key indicator among many.

Market signals

Asian session

  • A majority of economists polled by Bloomberg believe the RBA will cut rates tomorrow 
  • Australia's AIG Manufacturing Index rose to 56.4 in June
  • Monthly new-home sales for Australia were up 8.2% in June from minus 4.4% in May
  • China's Manufacturing PMI fell to 49.9 in July, below economist expectations of 50.1
  • The Caixin China PMI was stronger, coming in at 50.6, higher than the 48.8 estimate
  • Japan's manufacturing sector contracted for the fifth consecutive month in July
  • The Markit/Nikkei final manufacturing PMI came in at 49.3 
  • Asian markets traded mixed, with Chinese mainland shares falling behind regional peers
  • SHCOMP plunges lower on open, but recovers somewhat late in the Shanghai session
  • Nikkei 225 rallies on relative yen weakness

Forex ahead

  • USDJPY opens the week with a climb back towards the 102.50 area
  • EURUSD holding Friday's gains above 1.1150
  • GBPUSD in an upward channel out of late-July lows
  • AUD, NZD largely in range overnight from Friday's closes

From the Floor

Watch the charts.The real stress test is what happens in the markets daily,” says Garnry

Moneybags.There is too much cash in the system and most is going to Euroepan core bonds,” says Fasdal

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

In opinion

Today’s July release for US manufacturing is expected to hold on to the 53.2 reading – the highest in more than a year, writes James Picerno.

BoJ punt
The BoJ is stuck in no-man’s land, punting that Prime Minister Shinzo Abe’s fiscal package will save the day. The ball’s in his court now,
says Max McKegg.

Rate calls
It's going to be a week of important announcements, says Kay Van-Petersen, with the main events including the Japanese stimulus and central bank announcements on rates.

Beyond the BoJ

The USDJPY is still very much in play, but the Antipodean currencies as well as sterling are also likely to see some pronounced movements this week writes John J Hardy.

Pokémon no-go

Nintendo shares spiked massively on the Pokémon Go release,. but it was not enough to boost earnings. Now there appears little room for a rally says Christoffer Moltke-Leth.

Globalisation (and its discontents)

The globalised world order advocated by the Economist has many advantages, but in order to avoid popular discontent, strong growth figures are continually needed. Photo: iStock 

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.


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
- 沪ICP备13028953号-1

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