Article / 31 October 2017 at 8:02 GMT

Morning markets: Who's the next Fed chair, who'll Mueller charge next?

Senior Editor / Saxo Bank
Denmark

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Watchlist

  • Japan: Monetary policy decision (already announced, no change)
  • EU: Jobless rate (10:00 GMT)
  • EU: Flash estimate, Eurozone inflation (10:00 GMT)
  • Canada: GDP (12:30 GDP)


European bourses are likely to open softer on Tuesday after their Asian counterparts mostly tracked Wall Street lower in a listless overnight session. Speculation about the identity of the next Federal Reserve chair will occupy many traders' minds again today with the latest offering from the rumour mill being that policy dove Jerome Powell will probably be president Trump's choice for the job. US treasury yields fell sharply yesterday on this gossip.


Still with Trump, the probe by the former FBI director Robert Mueller into administration links to Russia is gathering pace with three former aides on the now-president's team formally charged yesterday. The Financial Times says the charges show that the investigation both has teeth and pace, while the newspaper's US commentator, Edward Luce, reckons that an embattled Trump will seek to divert attention from the probe and that we should "expect dramatic fireworks in the coming hours and days".

Elsewhere, the flap about Catalonia's bid for independence seems to be quelling, with the region's ousted president Carles Puigdemont having fled to Belgium, apparently to plead for political asylum.

Market signals

Asian session

  • Monday's fall on Wall St weighed on sentiment in Asian markets
  • Korea's Kospi Composite defied the gloom; it was up 0.86% to 2,523.53 at 0515 GMT
  • An easing in Seoul/Beijing tensions over missile defence helped drive up Korean equities
  • Japan's Nikkei 225 clawed back an early fall and closed exactly flat for the day
  • Japan's household spending fell 0.3% in September; the jobless rate was steady at 2.8%
  • Japan's industrial production declined 1.1% in September; it should pick up in October
  • The Bank of Japan kept its policy rate at -0.1%, and trimmed its inflation outloook
  • China's manufacturing PMI came in at 51.6 for October, down from 52.4 in September
  • Beijing's moves to clear up pollution helped pushed the manufacturing PMI lower
  • The Shanghai Composite edged higher; it was up 0.06% to 3,392.37 at 0521 GMT
  • Australia's S&P/ASX200 closed down 0.17% at 5,909.00
  • The NZ finance minister will "press ahead" with planned reforms to the central bank
  • Trump is likely to pick Jerome Powell as the next head of the Fed

Forex ahead

  • The US dollar edged higher against the yen; it was worth ¥113.1115 at 0541 GMT
  • The Australian dollar edged lower against the US dollar

From the Floor

Mueller probe "First indictments are in – charges not directly related to Trump, but...." – Hardy

Fed boost "Potential Powell choice for Fed sent yields lower and helped gold" – Hansen

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

In opinion

Good oil
The ASX enjoyed a reasonable morning on the back of oil price gains, but other sectors were not so strong, says Saxo Capital Markets in Sydney


Commodity strength
Crude has extended its gains, copper has firmed on the weaker USD, and raw sugar is heading higher, says the team at APAC Sales Trading.


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Japan was in focus today, with the Bank of Japan keeping  rates on hold, and the release of key economic data. Photo: Shutterstock

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