Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 21 February 2017 at 8:00 GMT

Morning Markets: Trump praised for security adviser choice



  • Switzerland: Trade balance (published)
  • France: CPI (published)
  • France: Flash PMI (0800 GMT)
  • Germany: Flash PMI (0830 GMT)
  • Eurozone: Flash PMI (0900 GMT)
  • Italy: CPI (1100 GMT)
  • US: Manufacturing PMI (1445 GMT) 

Once again US president Donald Trump makes it into the headlines with a staff decision but this time his decision should lead to a bit more stability. He is praised for making a wise decision, albeit at the second attempt, by naming Lieutenant General Herbert Raymond McMaster as his national security adviser.

McMaster, an academic as well as a military veteran, is said to be outspoken and of having a critical mind. Contrary to Trump and his former failed security adviser Michael Flynn, McMaster sees Russia rather as an opponent than a potential partner. 

From people to data. Today's flash survey data for Germany and Europe offers a fresh update on the outlook for GDP growth. The new numbers will help the crowd decide if the upbeat forecasts for the first quarter are still alive and well. So far, the trend looks encouraging.

The Bank of Italy’s Euro-Coin Indicator (a proxy for the Eurozone GDP growth rate) posted a 0.68% quarterly increase through January, up from the 0.4% rise officially reported for Q4 via Eurostat.’s current Q1 growth estimate is also pointing to a pickup in growth with a 0.7% advance.

There is also an important US PMI on tap. Another round of support for the manufacturing rebound is expected in today’s flash PMI data for February.’s consensus forecast calls for a slightly firmer PMI reading: 55.2, up from 55.0 in February. That would mean, the index will inch up to a 29-month high and provide more evidence that this cyclical segment of the economy is again posting moderate growth on a consistent basis.

French independent presidential candidate Emmanuel Macron is to rally in London today. Ten years ago Nicolas Sarkozy did campaign in Britain - and later won the election. Macron, the most pro-European of all French presidential candidates, is currently predicted to receive second most votes in the first round, beaten only by the right-wing candidate Marine Le Pen.

However, the scandal shaken conservative candidate Francois Fillon is very close behind Macron. In the final round, both are expected to beat Le Pen, but then polls have been fairly wrong when it comes to Brexit and Trump.

Market signals

Asian session

  • Japan's flash manufacturing PMI came in at a 35-month high of 53.5 in February
  • Iron ore was up 2.2% to a 2.5-year high
  • Asian markets traded mostly higher following the US holiday
  • The Nikkei was up 0.67% and the Kospi rose 0.98%
  • South Korean exports climbed 26.2% year-on-year in dollar terms, while imports rose 26%
  • Bucking the Asian trend, the ASX200 traded lower for the second day
  • The RBA expects rising business investment to add to growth by the end of 2018

Forex ahead

  • AUDUSD slipped slightly to 0.7666
  • The US dollar rose 0.5% to 113.64 yen

From the Floor

Asia stocks. “Asian equity markets are generally up, with South Korea’s Kospi being the best performer,” says Ryan Wu.

Industry checkup. “Today it’s PMI day in Europe,” says Peter Garnry.

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

In opinion

Today’s implied Eurozone GDP estimate for Q1 via the PMI Composite Index for February, is expected to hold steady at a 0.4% rate, writes James Picerno.

Iron will
Iron ore prices rose strongly as further steel capacity reductions saw steel prices surge, write Saxo's Sydney trading team. 

Pence reassures
US Vice-President reaffirms Nato commitment and Le Pen gains in polls, writes the Saxo APAC Sales Trading team

Commodity bets up
Hedge funds boosted bullish commodity bets to a nearly three-year high during the week that ended February 14, driven by demand for grains and a record oil long, says Ole Hansen.


 Cheesemaker with a wheel of Comte. Tuesday brings fresh measures of European industrial activity in the form of flash PMIs from France, Germany and the Eurozone. Image: Shutterstock

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