Article / 12 February 2018 at 8:00 GMT

Morning Markets: Uneasy calm; eyes on Wednesday's US inflation

Senior Editor / Saxo Bank




  • Switzerland: CPI (08:15 GMT)
  • Portugal: CPI (11:00 GMT)

Investor sentiment was fragile in Asia today, in the wake of further falls for stocks in Europe, and worryingly heavy falls last week on Wall St, despite a positive close on Friday. IMF chief Christine Lagarde's view of the market volatility as "necessary market corrections" may reassure some investors. But many are alarmed by the lack of a clear driver for the sudden lurches in stock prices.

With economic calendars on the thin side today we may have to wait as far as Wednesday for the next directional impulse: US CPI and retail sales are arguably the key release of the week. Headline CPI m/m is see gaining to +0.4 from +0.2 the previous month while inflation stripped of food and energy are seen flat at +0.2.

On the political front, UK prime minister Theresa May faces another difficult week in the ongoing Brexit process – rumours of a planned coup surfaced again over the weekend – so keep an eye out for any new signs of rebellion from within her conservative party.

Market signals

Asian session

  • Asian markets were calmer on Monday as S&P futures extended their bounce
  • The Dow Jones and the S&P500 closed higher on Friday
  • Both indices are down 10% from their January 26 highs, and still in correction territory
  • European stocks retreated on Friday; the Dax fell 1.4%; the Cac 40 lost 1.25%
  • Oil prices strengthened in Monday morning trading
  • The world's biggest hedge fund warned global markets are entering a new era of volatility 
  • The hedge fund – Bridgewater – said week's market turbulence was set to continue
  • Hang Seng Index rose 0.5% and Shanghai added 0.6% in afternoon trading
  • The banks weighed on the S&P/ASX200 and index declined 0.3%
  • South Korea’s Kospi index gained 1.2%
  • Japan's Nikkei was closed for a holiday
  • Brent crude rallied 59 cents to $63.38/b while US crude rose to $59.88/b.

Forex ahead

  • The JPY was up only marginally to the USD at 108.67 per dollar.
  • EURUSD added 0.3% to $1.2284 
  • GBPUSD was at $1.3861, up 0.2%
  • AUDUSD  gained and held above 0.78

From the Floor

Over yet? "The question this week is whether the bounce is over yet or will we see another round," says Hardy.

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

In opinion

Unsettling unknowns
The lack of a clear cause for wild swings in global stocks is unsettling for investors, says the team at Saxo Capital Markets Australia.

Budget blowout

US President Donald Trump has signed a two-year budget that puts the US on course for trillion-dollar deficits for years to come, writes the team at Saxo APAC Sales Trading.

Selloff sense
In his Macro Monday update, Saxo's global macro strategist Kay Van Petersen asks if the equities selloff is over.


IMF chief Christine Lagarde sees the current stockmarket volatility as "necessary market corrections"; she took part in the Arab Fiscal Forum in Dubai on Saturday. Photo: Shutterstock

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