Article / 16 August 2016 at 7:00 GMT

Morning Markets: USDJPY testing the lower limits

Head of Editorial Content / Saxo Bank

Morning Markets: Prices


  • Germany: ZEW Economic Survey (0900 GMT) 
  • US: Housing Starts (1230 GMT)
  • US: Industrial Production (1315 GMT) 

The Japanese yen was stronger overnight, with USDJPY tumbling through resistance around the 100.75 area and approaching the big, 100 handle.

One element assisting the safe-haven rally is the lowering of Federal Reserve rate hike chances, whose probability has now dropped below 50% for 2016 according to forecasts.

Sterling is also trending lower after rallying somewhat in the New York session; although the pair remains significantly oversold, the "near-inevitable" short squeeze does not look likely in the next minuted and hours.

Crude prices remain near their three-week highs with the prime directional factors remaining verbal intervention from Russia and Opec, as well as short-covering from the previous rally.

Today's celendar sees German ZEW data front and centre as analysts expect a mixed August report. Later in the day, we have US housing starts and industrial production where a significant beat or shortfall is likely to add new direction to the greenback trade.

Market signals

Asian session

  • Australia's consumer confidence rebounded from last week’s dip, rising 2.5%
  • RBA expects inflation to remain low but growth prospects are good
  • Morgan Stanley forecasts iron ore at $40/tonne in second half of 2016
  • Brent was at $48.14/b, down 21 cents and WTI at $45.56/b, down 18 cents
  • Emerging market stocks and currencies extended gains in Asian trading
  • South Korean shares resumed trading after a holiday, climbing for an eighth day

Forex ahead

  • USDJPY plunges to 100.25 area as yen rally continues
  • The GBP slips to near its three-decade low in early trade, at $1.2887
  • The South Korean won led a measure of currencies higher
  •  A gauge of swings in the yuan dropped to near its lowest level since October
  • CNH one-month implied volatility dropped to 3.64%
  • The AUD was trading in a tight range around 76.7 US cents in mid Asia trade

From the Floor

USDJPY slide. “I think the 100.0 mark is very likely to be tested”, says Moltke-Leth

Opportunity knocks.Intraday sellers of WTI could be looking for a retracement back to $43-44/barrel”, says Hansen.

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

In opinion

Germany's ZEW release of August sentiment is expected to produce a mixed report today although the consensus is for a rebound, says James Picerno.

Oil boost

Asia's markets just love when the oil price stabilises - it's a cue to confidence and this morning's markets were no exception, says Saxo's Singapore team

Emerging power

Emerging market stocks advanced for an eighth straight day as Russian shares rallied to a record high. As the USD slides, so the EMs rise, says Saxo Capital Markets  

Off the boil

The USD managed a recovery rally after Friday's poor data, but bulls have apparently run out of gas as the greenback is sliding lower again, writes John J Hardy.

Tokyo Tower

Bright lights, big rally: The JPY has emerged from the tentative Friday dollar rally 
a winner as USDJPY heads toward the big, 100.00 handle. Photo: iStock

Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
Click here
to make sure you're up to date with the latest developments.


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail