Ole Hansen
Saxo Bank’s head of commodity strategy Ole Hansen considers the implications of pledges by Saudi Arabia and Russia to raise oil production despite the likes of Iran and Venezuela not backing the move.
Article / 28 September 2016 at 7:00 GMT

Morning Markets: The debate, the data, and the dollar

Head of Editorial Content / Saxo Bank

Morning Markets: Prices


  • Germany: Gfk Consumer Climate Index (0600 GMT) 
  • US: Durable Goods Orders (1230 GMT) 
Today's US durable goods release follows yesterday's consumer confidence print as a second key data report after the first presidential debate between Donald Trump and Hillary Clinton skewed sentiment on the premise that a Trump presidency might derail the current economic order. According to's James Picerno, the latest release is expected to come in softer which may give the USD some (downward) direction in the wake of both the debate and last week's Federal Open Market Committee meeting.

The main story of the day, however, is the summit between Opec and non-Opec oil producers in Algiers. Oil has slipped lower on the apparent failure of Iran and Saudi Arabia to come to a deal regarding an output freeze, but there may well be a measure of hope still baked into oil prices, particularly as it concerns Russian production and that country's potential willingness to sign an agreement.

Following yesterday's Iranian demurral, Saudi officials have signalled that they might be willing to adjust their terms lower as the International Energy Administration came out saying the market outlook is worsening, with energy minister Khalid Al-Falih stating that Iran, Libya, and Nigeria should be permitted to "produce at the maximum levels that makes sense".

All in all, however, the Algiers meeting may be something of a damp squib as even what could appear to be the beginning of a consensus regarding oil does not appear likely to be resolved in full at today's summit.

Market signals

Asian session

  • Oil traded below $45/b before producers meet to discuss output in Algiers
  • West Texas Intermediate crude was little changed at $44.68/b in early trade
  • In early Asia trade, MSCI Asia Pacific Index declined 0.9%
  •  ASX200 climbed higher at the open on AGL share buyback before turning down 0.1%
  • Japan's Nikkei 225 was down 1.19% after renewed strength in the yen 
  • Westpac MNI China Consumer Sentiment Indicator up 3.3% in September

Forex ahead

  • AUD lost most of the gains made after USD rose following the presidential debate
  • The yen recovered from losses post Presidential debate and flirted with one-month highs
  • USD traded at 100.41 yen, having dropped from Tuesday's high of 100.99
  • USD was down 0.3% in early trade, the Malaysian Ringgit slipped 0.4%

From the Floor

Coming up empty.No oil deal is expected at today’s Opec meeting,” says Moltke-Leth

Treading water. There’s no conviction to be found [and] USDJPY continues to tread water,” says Hardy 

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

In opinion


The consensus forecast for US new durable goods orders is a 1.9% monthly slide, which translates into another negative year-over-year comparison, writes James Picerno

Peso vs polls

Much of the criticism of Donald Trump is well-founded, writes Juhani Huopainen, but it's not fair to blame his rise in the opinion polls for the dumping of the Mexican peso.

AGL lifts ASX

The local market was led higher at the open by AGL, after the electricity generator announced a $600m share buyback plan, writes the team at Saxo Capital Markets (Australia).

At oil's mercy

A raft of soft macroeconomic data are doing the Canadian dollar no favours of late, particularly considering the pre-Algiers volatility seen in crude says Michael O'Neill.

Port of Los Angeles

Sunset at the Port of Los Angeles: Today's US durable goods order could be crucial for dollar direction in the wake of the presidential debate and FOMC. Photo: iStock

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