Article / 15 December 2017 at 8:00 GMT

Morning Markets: Tax reform on the ropes?

Head of Editorial Content / Saxo Bank

Morning Markets


  • IE: GDP (1100 GMT)
  • CA: Monthly manufacturing sales (1330 GMT)
  • US: Industrial Production and Capacity (1415 GMT)
Equities sentiment flagged in the US Thursday and in Asia overnight on renewed doubts over the Trump administration's ability to pass its tax bill.

The tax reform programme is at risk as Republicans such as Florida's Marco Rubio, aware of their potentially decisive role in the vote given the slim GOP majority, threaten to withhold support unless the bill is modified to include their pet projects.

The dollar fell in tandem with stocks, and the weak sentiment is expected to spread to Europe with investors looking for a mixed-to-weak start today.

The strength in EURUSD, however, is not just down to the weaker greenback after Tursday's European Central Bank meeting saw inflation and growth forecasts revised upwards.

Today's data calendar sees Irish GD at 1100 GMT at US industrial production numbers at 1415 GMT.

Market signals

Asian session

  • Asian markets were mixed following losses in US markets
  • The Nikkei led the falls before recovering slightly
  • The ASX200 closed 0.2% lower at 5,997 led by banks
  • Uncertainty around US tax reform may hit US equities 
  • Japanese retail investors were seen shifting from currency trading to bitcoin
  • Disney buys Fox assets in a $52 billion split of Murdoch's core assets
  • Big Japanese manufacturers' business confidence improved for a fifth straight quarter 
  • The headline index for manufacturers' sentiment stood at plus 25, an 11-year high 
  • Japan's economy expanded at an annualised 2.5% in Q3 
  • A South Korean blockchain association will boost transparency in cryptocurrency trading

Forex ahead

  • The NZD rose against the EUR after Mario Draghi reiterated his commitment to stimulus 
  • The USD was on the defensive following wrangling over the US tax bill

From the Floor

Oil capped. "End-of-year profit-taking is reining oil prices in despite supply disruptions," says Hansen

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

In opinion

ASX wilts
Whenever US shares take a breather, the ASX wilts and even a rising oil price overnight couldn't resuscitate prices, writes Saxo Capital Markets.  

Hawkish expectations
The USD was mixed overnight with the flurry of central bank meetings while the EUR came off as the market was expecting a more hawkish ECB, says Saxo's Singapore trading team.


 A quarterly business outlook survey shows Japan's corporate sentiment 
has improved to its highest level in 11 years. Photo: Shutterstock

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