​The Trump administration has not yet formally deployed the long-awaited latest $200 billion in tariffs against China, but a new Wall Street Journal report indicates that Japan might be next on the agenda.
Article / 18 December 2017 at 8:00 GMT

Morning Markets: Will protectionism trump tax reform?

Head of Editorial Content / Saxo Bank

Morning Markets



  • EU: EU Harmonised CPI (1059 GMT)
The on-again, off-again tide of bullish sentiment regarding Washington's tax reform bill received another shot in the arm Friday on reports of a Republican deal, pushing US stocks to fresh record highs and boosting Asian equities overnight.

Hong Kong's Hang Seng index rose 1% to 29,137.60 while the Nikkei 225 gained 1.55% to 22,901.77. Australia's S&P/ASX 200 rose 0.7% to 6.038,90.

One major caveat, however, continues to surround President Trump's protectionist leanings regarding China with the president widely expected to accuse Beijing of "economic aggression" in today's national security strategy.

The greenback trades largely flat into the European bell with the Antipodean currencies gaining ground led by the kiwi.

Industrial and precious metals retain a bid tone into Monday's European session with crude oil prices on the rise as well. Today sees the launch of Bitcoin futures on the Chicago Mercantile Exchange with traders looking for signs that the astonishing cryptocurrency rally remains in good health.

Market signals

Asian session

  • Asian markets were trading largely up on US confidence the tax bill will be passed
  • The US Republicans released their final version of the tax bill on Friday
  • Oracle will buy ASX-listed construction software group Aconex in a $A1.6 billion deal
  • An underlying cash deficit of $A23.6 billion is now expected in 2017-18 for Australia
  • New Zealand consumer confidence dipped in December, the third consecutive decline
  • South Africa’s rand fluctuated ahead of the ruling party’s leadership vote
  • Bitcoin traded at around $19,000 as futures trading debuted on the CME 
  • Japan’s Topix index closed up 1.4%, with the Nikkei 225 rising 1.55%.
  • Hong Kong’s Hang Seng Index advanced 1%, with Shanghai down 0.2%

Forex ahead

  • The JPY was treading water, worth 112.69 per USD in late trade.
  • EURUSD was trading at around $1.1771
  • GBPUSD was at $1.3348 after slumping 0.8% Friday.

From the Floor

ZAR surge. "A Ramaphosa win would be very good news for South Africa," says Hardy

Santa Claus is coming to town. "We are getting ready for a final leg up in equities," says Garnry

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

In opinion

Tax effect
Asian markets were higher early Monday on Wall Street leads, which reached record highs on expectations the US tax bill will be passed this week, write Saxo's Singapore trading team

EURUSD action
A possible one-month Head & Shoulders is forming for EURUSD with key support at 1.1715, writes Max McKegg in this trade view.

Metals lead the way

The recent surge in industrial metals offset the dip seen in agricultural and energy commodities last week, writes Saxo Bank head of commodity strategy Ole Hansen.


 The launch of bitcoin futures on the CME exchange on Monday supports expectations the cryptocurrency’s red-hot rally in the cash market could continue. Photo: Shutterstock

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