Article / 07 June 2017 at 7:00 GMT

Morning Markets: USD, Wall Street stall as Trump worries gain ground

Head of Editorial Content / Saxo Bank
Denmark

Morning Markets


Watchlist

  • Poland: interest rate decision (0959 GMT)
  • US. petroleum status report (1430 GMT)
  • Japan: Q1 GDP (2350 GMT)

Wall Street and the USD slid lower Tuesday as hopes for Trump administration-led reforms, most notably on taxation, receded further still into the distance. Asian bourses, however, were largely able to power through the malaise and head higher, with the Shanghai Composite gaining 1%, the Shenzhen Composite gaining 2%, and the Nikkei scraping into the green with a 0.02% rise. 

Australian quarterly GDP data came out in line with expectations overnight, showing the economy as having grown by 0.3% in the first three months of 2017, down from 1.1% in the previous quarter. The slowdown was expected, and many analysts thought that the numbers would come out behind expectations, so the release spurred some AUD buying that pushed the currency from the 0.75 handle to 0.7540 versus USD. 

The S&P ASX 200 rose 0.1% on banking, telecom, and materials gains. 

Oil prices slid mildly lower, with both Brent and WTI off by 0.1% as volatility relating to the Qatari diplomatic crisis has investors wary. 

Today's session sees the release of the Polish interest rate decision and the US Energy Information Administration's weekly petroleum status report. Traders largely expect markets to be subdued ahead of Thursday's European Central Bank outing and the UK general election.

Market signals

Asian session

  • UK poll shows Conservatives could win a larger majority than earlier projected 
  • Australia first-quarter GDP rose 0.3% from the previous quarter's 1.1%
  • Australia has now had 103 quarters without recession
  • Gold edged lower after hitting a seven-month high overnight on safe-haven demand
  • It moved to to $1,291.21/oz after surging 1.1% in the previous session
  • WTI crude oil lost 0.1% to $48.14/b following its 1.7% surge on Tuesday. 

Forex ahead

  • AUD rose to a fresh one-month high, climbing 0.5% to 75.41 US cents
  • JPY fell 0.2% to 109.64 per dollar in mid trading after climbing 0.9% on Tuesday.
  • The USD index is trading in a downward channel around 96.55

From the Floor

May’s performance. “I give her a C-minus for her campaign,” says Jakobsen.

Stalled.We are seeing the oil market pausing a bit,” says Hansen.

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

In opinion

1..2..3
Output growth revised up to 0.6% will underpin the view that a modest but sustainable recovery is underway in Japan, writes James Picerno.

'A terrible campaign'

Theresa May is still expected to win the US election but her poor campaign performance will likely weaken her overall position and mandate writes Saxo's strategy team.

Seeking a safe haven
The yen and gold are winners as investors seek to avoid risk amid tension in the Middle East and ahead of the UK election, writes the team at Saxo APAC Sales Trading.

Aussie unshackled
After positive GDP data and a Reserve Bank giving no hint of any need to ease monetary policy further, the way seems clear for the AUD to move higher, writes Max McKegg.

EIA

Today's US oil inventories data will add fuel to a market spooked 
by the developing Qatari crisis. Photo: Shutterstock

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