Article / 01 December 2017 at 8:01 GMT

Morning Markets: Stocks turning over after US record highs

Head of Editorial Content / Saxo Bank



  • EU: Manufacturing PMI (0900 GMT)
  • UK: Manufacturing PMI (0930 GMT)
  • Canada: Labour Force Survey (1330 GMT)
  • Canada: GDP (1330 GMT)
  • Canada Manufacturing PMI (1430 GMT)
  • US ISM Manufacturing Report (1500 GMT)
Japanese and Korean shares followed their US counterparts higher overnight, with mainland Chinese shares in Shanghai and Shenzhen climbing (barely) into the green in the late APAC session. Hong Kong’s Hang Seng, meanwhile, continued its slide with tech-sector darling Tencent falling 2.2%.

Crude oil prices extended their gains following Opec and Russia’s decision to extend their production cut deal while energy shares in Australia followed suit.

One factor supporting equities Thursday was US Senator John McCain stating that he would vote in support of the planned tax reform programme: McCain is a longtime Trump adversary and cast the deciding vote against Obamacare repeal after campaigning on the issue for years, signalling to many that his differences with the president would prevent him from supporting any legislation from the Trump administration.

On Thursday evening, however, congressional objections to aspects of the planned tax bill left Senate leaders scrambling to implement last-minute adjustments, placing the much-anticipated package in doubt.

European equities are expected to open in the red today ahead of a suite of PMI date from France, Germany, the Eurozone, and the UK.

Market signals

Asian session

  • The Dow Jones Industrial Average soared past 24,000 for the first time on Thursday
  • Opec and Russia agreed on Thursday to extend their oil output cuts to the end of 2018
  • The Nikkei Asia300 index is up 31% in its first year, boosted by China, S Korea
  • The Japanese emperor will abdicate in April next year
  • Japan's final Manufacturing PMI came in at 53.8, showing a strong expansion
  • Japan's core inflation rose 0.8% year on year in October; it's still well below target
  • China's manufacturing continued to improve in November, albeit at a marginal pace
  • The Caixin Manufacturing PMI came in at 50.8, down from October's 51
  • Hong Kong's Hang Seng retreated; it closed down 0.33% to 29,082.31
  • The Australian Industry Group PMI rose 6.2 points to 57.3 points in November
  • Australia's benchmark S&P/ASX200 closed up 0.33% at 5,989.80
  • Gains for energy stocks and three of the big four banks helped lift the S&P/ASX200

Forex ahead

  • China's manufacturing data gave AUD a lift; it was worth 0.7567 at 0755 GMT
  • USD edged lower against the yen; it was worth ¥112.60 at 0655 GMT

From the Floor

Bonds dump. "The selloff in bonds is weighing on gold and particularly silver," says Hansen.

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

In opinion

US dollar falters
The USD started off strongly in the US session, but then came portfolio readjustments, and the dollar was given the heave-ho, says Michael O'Neill.

Aussie stocks revival
The ASX got a much needed fillip from a strong US market overnight, and the banks returned to strength as well, says Saxo Capital Markets.

Inflation fears
The US may be lifting its rates this month but what about the other economies? Fears are rife that inflation just isn't strong enough – even in the US, says Max McKegg.

Onward and upwards
The GBP squeeze higher continues and is close to breaking year highs on positive Brexit talks, explains Saxo's Singapore trading team


 China’s manufacturing activity grew at the weakest pace in five months in November as input costs remained high and pollution measures weighed on confidence. Photo: Shutterstock

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