Article / 11 January 2018 at 8:00 GMT

Morning Markets: US Treasuries recover, stocks turn lower

Head of Editorial Content / Saxo Bank
Denmark






Morning Markets


Watchlist

  • Australia: Retail trade (published)
  • Greece Labour force survey (1000 GMT)
  • EU: Industrial production (1000 GMT)
  • Portugal: CPI (1100 GMT)
  • Eurozone: ECB accounts of its last monetary policy discussions (1230 GMT)
  • US: PPI (1330 GMT)
  • US: Weekly jobless claims (1330 GMT)
  • US: EIA weekly natural gas storage report (1530 GMT)

Wednesday's US session saw Wall Street suffer its first decline of 2018 while the selloff afoot in US Treasuries, which came on the back of a report claiming that Chinese officials had recommended a slowdown in US debt purchasing, slowed in Asia after China’s State Administration of Foreign Exchange called the story's accuracy into question. 

The US dollar gained some ground overnight, particularly versus the JPY as the recent protracted tumble in USDJPY reversed at the 11.30-40 level.

Bitcoin prices turned lower as well with the XBTUSD rate touching $12,800 on news that South Korea, a major centre for Bitcoin, is planning a bill to ban crypto trading.

Oil prices remain at range highs on a combination of geopolitcal tensions, declining inventories, and production cuts.

On the data front, today's calendar sees the EU out with industrial production numbers at 10:00 GMT and an ECB update at 12:30 GMT followed by US PPI and unemployment figures at 13:30 GMT.

Market signals

Asian session

  • Japan's Nikkei 225 closed down 0.33% at 23,710.43
  • Chinese authorities ordered the closing of Bitcoin operations
  • South Korea will also ban Bitcoin, due to tax evasion, gambling addiction concerns
  • Investor supremo Warren Buffett predicts cryptocurrencies will come to a bad end
  • A Bloomberg report claims China is slowing or even halting US Treasury purchases
  • The report has so far had only a limited impact on forex, gold and bond markets
  • China's GDP growth reached 6.9% in 2017: Premier Li Keqiang
  • A gas shortage has hurt Chinese industry, as Beijing tries to shift away from coal
  • Australia's retail sales soared 1.2% in November, the biggest monthly rise in 4 years
  • Shares in Aussie retailers are up 5% plus since December, after sales gloom lifted
  • Banks weighed on the S&P/ASX200, which closed down 0.49% at 6,067.60

Forex ahead

  • Upbeat retail data gave AUD a lift; it was worth 0.7863 at 07:50 GMT, up about 0.4%
  • JPY gave up some of Wednesday's sharp gain; USD was worth ¥111.80 at 07:50 GMT

From the Floor

Fake news? "China has effectively denied reports that it has recommended a slowdown in US Treasury purchases," says Hardy.

Retreat in sight. "I am still looking for a test of key support in gold," says Hansen.

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

In opinion

USD roundabout

It was a roundabout affair for the US dollar overnight in the US, with  concerns about a China sell-off of US Treasuries fuelling fears, says Michael O'Neil

Aussie cough

The ASX did what it always did: catching everyone else's flu and suffering the worst symptoms. So Wednesday was just a normal day on the Aussie bourse, as Saxo Capital Markets reports 

No Armageddon yet
Markets have reacted to reports that China views US Treasuries as less attractive than before, but the news has not sparked an investment Armageddon, says Saxo APAC Sales Trading

Trigger-happy yen traders

Traders bidding up the yen after finetuning by the Bank of Japan have jumped the gun, as the BoJ won't make any policy shifts until later this month at the earliest, says Max McKegg

EM bonds rally
The year has started with a bang for emerging-market bonds, even though core bonds' performance is challenged by an overall landscape of increasing yield, says Simon Fasdal.

Bullish gold
Gold has been consolidating its December gains, it would require an unlikely break below $1,270/oz to derail the yellow metal's newfound strength, writes Ole Hansen.  



ECB in Frankfurt

Thursday brings the record of the ECB's most recent monetary 
policy deliberations. Photo: Shutterstock 

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