John J Hardy
Saxo Bank’s head of FX strategy John Hardy takes a closer look at trends and moves in today’s forex charts, including EURUSD, USDJPY, AUDUSD, and EURSEK.
Article / 01 March 2017 at 2:21 GMT

Morning Report APAC: US equities down ahead of Trump speech

APAC Sales Trading Desk / Saxo Capital Markets


  • The US economy expanded less than expected in the fourth quarter of 2016
  • The Australian economy grew 1.2% in Q4 and 2.4% in 2016
  • All three US shares indices were down ahead of Trump's address to Congress
  • USD strengthened ahead of the presidential address


By Saxo APAC Sales Trading

Economic data of the day (Singapore Time)




0930: JN – Bank of Japan's Takehiro Sato speaks in Tokushima

1000: US – Trump to speak before Congress

2130: EC – European Central Bank’s Jens Weidmann speaks in Ljubljana

0200: US – Federal Reserve’s Robert Kaplan speaks in Dallas

0400: NZ – Reserve Bank of New Zealand Governor Graeme Wheeler speaks  

0700: US – Fed’s Lael Brainard speaks at Harvard 

Overnight news

US:  The economy expanded less than expected in the fourth quarter, with GDP printing 1.9%(exp. 2.1%) despite an uplift in consumer spending. The economy expanded 1.6% for the year, its worst performance since 2011. 

The core PCE increased 1.2%, less than expected (1.3%) (mkt est: +1.3%; prev: 1.3%).  Inventories at wholesalers edged down 0.1% while stocks at retailers rose 0.8%. Retail inventories ex-autos, which are used in the calculation of GDP, were unchanged.  

The Conference Board’s index of consumer confidence rose to 114.8 (exp. 111.0), the highest reading since July 2001, from 111.6 in January. Consumers remained upbeat about the labour market amid expectations of income gains.  

Federal Reserve: Dallas Fed President Kaplan said in an interview on CNBC that the central bank should move "sooner rather than later" . "I actually think we're now much closer to meeting our employment and inflation objectives," he said. "Once you've decided that, you need to take advantage of those windows when they present themselves."  

Kaplan said he believes market-based measures of probability are probably close to correct. "I don't think the exact timing is the most important thing. I think the path of rates is," he said. "In that regard I think the market is probably in the neighbourhood of where we're heading." 

India:  India grew more than expected at 7.0% YoY for Q4 (exp. 6.1%). 

Australia: The economy grew faster than expected, with GDP printing 1.1% seasonally adjusted QoQ for Q4 (exp. 1.1%) and 2.4% YoY (exp. 2.0%). 



USD strengthened ahead of Trump's speech to Congress this morning. DXY is still on the uptrend slope made by the 100-day MA. The first main resistance will be at 102.

USDJPY bounced off the 100-day MA at 112 and is almost back in the Ichimoku cloud.  

The biggest mover was USDCAD which rallied almost 1%, breaking the 200-day MA and above the 100-day MA. The move was mainly due to short-term technical stops above 1.3220 . 

GBPUSD is at an important level trying to break the 100-day MA for the first time since the end of January. A break would open the door to a move lower to 1.2000.  

Emerging Markets: USD is finding good bidding interest from funds against most EM currencies. Currencies to watch for an opportunity to move higher are KRW, TWD and BRL, which rallied a lot on foreign equity and bond inflows. 

Foreign exchange movement


Strong interest to buy USD Gamma in AUD, JPY and downside EUR. Funds are buying topside USDJPY in the 2 months area.



The US yield curve flattened, as short-duration yields rose with odds of a March rate hike increase after the Fed’s William's hawkish comments, while long end benefited from month-end index extending maturity rebalancing.

Spreads between French 10-year and German 10-year bonds continued to narrowed down as the highlighted political risk from Marine Le Pen eased. Peripherals benefited out of that as well.  








All three US indices were down yesterday as the market awaited the address of President Trump to Congress. The Dow snapped its record 12-day winning streak but was down only marginally.

European markets finished higher, with shares in France leading the region. The CAC 40 was up 0.28%. 

Valeant Pharmaceuticals reported a weak set of Q4 results and a loss of $515m as the drug makers plunged 14% before closing at $14.38. Despite the poor result, the CEO of Valeant is very positive and hopes for a turnaround in 2017. Valeant closed at $14.38.

Shares of Target fell 12.17% in morning trading on Tuesday after the discount retailer released its fourth-quarter earnings report. Target also readjusted its 2017 Q1 earnings outlook to $0.80-$1.00, down from $1.29 last year, and poor guidance was the reason for the drop.

Asia-Pacific stocks

Hong Kong

Analyst Ratings: 

  •  Brilliance China (1114 HK): Raised to neutral at UBS 
  • Chalco (2600 HK): Raised to buy at Deutsche Bank 
  • China Resources Power (836 HK): Raised to hold at HSBC 
  • CNBM (3323 HK): Raised to buy at Guotai Junan 
  • SAIC Motor (600104 CH): Raised to buy at Goldman 


  • Developers: H.K. Jan. mortgage approvals down 12.9% from Dec. 
  • Refiners: China won’t adjust fuel prices for current cycle: NDRC 
  • Retail, tourism: Hong Kong Jan. China visitor arrivals rise 7.7% on year 
  • BOC (3988 HK): To sell $391m of assets to BOC HK (2388 HK) 
  • China Comm Const (552 HK): Singapore unit gets capital injection 
  • CICC (3908 HK): Ding Xuedong resigns as chairman of board 
  • Datang Power (991 HK): Censured by Hong Kong exchange 
  • Galaxy (27 HK): 4Q profit beats estimates 
  • Great Eagle (41 HK): 2016 core profit rises 14% to HK$2.02bn 
  • Hutchison Telecom (215 HK): FY net HK$701m vs HK$915m year ago 
  • MTR (66 HK): Awards Wong Chuk Hang site to Ping An Insurance (2318 HK) units, Road King (1098 HK) 
  • SHK Properties (16 HK): Half-year profit rises 57% 
  • Yingde (2168 HK): Sun, Strutt say KCS Trust won’t vote at EGMs 


Analyst Ratings: 

  • Ajinomoto (2802): Rated new neutral plus at Iwai Cosmo Securities 
  • Asahi Glass (5201): Cut to neutral from buy at Okasan Securities 
  • Chiba Bank (8331): Raised to buy from neutral at Mizuho 
  •  Mitsui Mining & Smelting (5706): Rated new outperform at SMBC Nikko 
  • Nippon REIT (3296): Cut to neutral at Mitsubishi UFJ Morgan Stanley 
  • OSG (6136): Rated new neutral plus at Iwai Cosmo Securities 
  • Sumitomo Metal Mining (5713): Rated new neutral at SMBC Nikko 


  • Asanuma (1852): Seeks to raise up to 2.55b yen from public share sale 
  • Askul (2678): Says 9.57b yen of tangible fixed assets, 60m yen of software and 2.52b yen of inventory assets related to a warehouse fire damage will be covered by insurance 
  • Daiichi Koutsu Sangyo (9035): To conduct 2-for-1 split on April 1 
  • Daisan Bank (8529), Mie Bank (8374): Start talks with goal to merge in April 2018 
  • HIS (9603): 1Q operating profit -46% to 2.55b yen 
  • Honda Motor (7267): Announces new research and development structure; hires Stanford University professor Edward Feigenbaum as AI adviser 
  • Isuzu Motors (7202): To acquire control of General Motors East Africa 
  • JFE Holdings (5411), Tepco (9501): To partner on environmental, municipal infrastructure projects 
  • JX Holdings (5020): JX Energy to process 4.87m kls of crude in March, 5% less y/y 
  • Maeda Road Construction (1883): Japan FTC conducted on-site inspection as a part of asphalt pricing probe 
  • Marubeni (8002): To book 2b yen gain for absorbing Oita solar unit 
  • MBS (1401): To conduct 10-for-1 stock split effective April 1 
  • Mitsui & Co (8031): Sells entire stake in Bald Hills Wind Farm 
  • NTT Docomo (9437): Reaches agreement with Tata Sons to settle a more than two-year dispute over terms of its stake sale for a joint wireless service 
  • Obayashi Road (1896): Says Japan FTC conducted on-site inspection for price-fixing probe 
  • PanaHome (1924): Says the premium offered by Panasonic is “sufficiently high”; projects full-year dividend of 21 yen.share vs 20 yen year ago 
  • Panasonic (6752): Forecasts full-year dividend of 20 yen/share vs 25 yen year ago 
  • Park24 (4666): 1Q operating profit -14% to 4.26bn yen 
  • Sakura Internet (3778): To sell shares to the public for 976 yen each to raise up to 2.78bn yen 
  • Sumitomo Dainippon Pharma (4506): Says China Food and Drug Administration grants approval for drug import license for a schizophrenia drug 
  • Taisei Lamick (4994): To sell shares to the public for 2,856 yen each for proceeds of up to 2.02b yen 
  • Takeda Pharmaceutical (4502): To transfer 200 workers to Bushu Pharmaceuticals under science partnership 
  • Toray Industries (3402): Gets U.S. FDA approval to start phase 1 trial for TRK-950 drug 
  • Willplus Holdings (3538): To conduct 2-for-1 stock split on April 1 


  Analyst Ratings: 

  •  AWE (AWE): Raised to neutral at Credit Suisse, PT A$0.50 
  • Bank Of Queensland (BOQ): Cut to hold at Bell Potter, PT A$12.50; raised to buy at Shaw and Partners 
  • Harvey Norman (HVN): Raised to buy at APP Securities, PT A$5.76; Cut to underweight at JPMorgan, PT A$4.60 
  • Resolute Mining (RSG): Cut to hold at Baillieu Holst, PT A$1.72 
  • Spotless (SPO): Cut to sell at Canaccord, PT A$0.73 
  • WorleyParsons (WOR): Raised to neutral at Macquarie, PT A$10.50 


  • Central Sydney fuels a quarter of Australia’s economic growth 
  • Overseas ownership of Australian bonds falls to nine-year low 
  • Ex-dividend: Alumina, Crown Resorts, Perpetual, Platinum Asset, Telstra 
  • Afterpay (AFY): Wilson, Bell Potter launch Afterpay block trade, AFR Reports 
  • AUB Group (AUB): Block trade of 5.65m shares crosses at 4.9% discount 
  • Cooper Energy (COE): Subsea 7 awarded ‘sizeable’ contract offshore Australia 
  • Clean TeQ (CLQ): Pengxin invests A$81m, to help finance Syerston 
  • Crown Resorts (CWN): To sell golf courses, cut sport links: Australian 
  • Fortescue (FMG), BHP Billiton (BHP), Rio Tinto (RIO): Iron ore falls 1.2%, according to a price index compiled by Metals Bulletin 
  • Qantas (QAN): In talks with Citi about starting new credit card: AFR 
  • Sky Network TV (SKT): Not terminating merger deal with Vodafone yet 
  • Wesfarmers (WES): Briscoe Group may be among bidders for Officeworks unit: The Australian 
  • Woodside Petroleum (WPL), Oil Search (OSH), Karoon (KAR), Santos (STO): Oil falls amid signs of Opec output gain while gasoline tumbles



USD strengthened ahead of Trump's speech to Congress. Photo: Shutterstock


– Edited by Susan McDonald

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