Article / 13 March 2018 at 1:39 GMT

Morning Report APAC: Weak market awaits clues on US inflation

APAC Sales Trading Desk / Saxo Capital Markets


  • US inflation report expected to give clues Federal Reserve policy tightening. 
  • Japanese and Aussie stocks largely unmoved with KOSPI also little changed
  • JPY the only currency reacting overnight, up 0.1% at 106.27 to the USD

By Saxo APAC Sales Trading

Economic data of the day (Singapore Time)



Speeches (Singapore Time)

22:15: CA - Bank of Canada governor Stephen Poloz speech in Kingston

06:10: AU - RBA’s Kent gives speech in Sydney

Overnight news

Market Summary: It was a quiet day for markets as lack of data. Concerns on tariffs made equities give up some gain from good job data in US. Treasuries were higher on the back of weakening dollar, while JPY strengthened. Commodities fell led by oil, as concerns on US production looms.    

Libor-OIS spread at six-year high : The Libor-OIS spread is regarded as a measure of how expensive or cheap it will be for banks to borrow, as shown by Libor, relative to a risk-free rate, the kind that’s paid by highly rated sovereign borrowers such as the US government. 

The Libor-OIS spread provides a more complete picture of how the market is viewing credit conditions because it strips out the effects of underlying interest-rate moves, which are in turn affected by factors such as central bank policy, inflation and growth expectations. 

Reasons behind the surge are three fold as mentioned by Bloomberg. First, there is a big trunk of Treasury bill supply after the US government last month resolved the borrowing limit impasse.

 Second, tax reform brings back money, however it's mostly kept in the form of short-term instruments, dampening the demand. Last but not least, is the balance sheet shrinkage caused less reserves in the financial system.    



Foreign exchange



The USD closed lower in a quiet trading day, mostly driven by headline report that US budget deficit is at highest level in six years.

JPY and CHF are higher as risk appetite waned ahead of US CPI data, which is expected to create ripples in the market.

Emerging Markets: Quiet day for emerging market currencies with slight drop generally. Turkish Lira led the loss with 0.8% decline on the back of increased current account deficit, as Turkey’s economy relies heavily on foreign capital inflows. 

Ruble is weaker amid issues on spy poisoning and getting pressure from UK.

Foreign exchange movements


Volatilities are generally lower as lack of data and market interests are low ahead of US CPI data tonight, which is expected to bring some life to the market.



Bunds were higher taking the hint from solid demand in US auctions. Peripherals generally gained with Italy underperformed ahead of heavy supply today.

US treasuries managed to log with some gains despite heavy supply amid 3Y and 10Y auctions, partly supported by dollar decline and may also benefited from short covering in 5Y and 10Y futures.  






US: Dow (-157 points) and S&P 500 (-3 points) closed off as investors worried a trade war persist.

The Dow rose more than 100 points earlier in the session as shares of Apple and Goldman Sachs reached all-time highs. However, market was dragged down by Boeing, Caterpillar and United Technologies all falling at least 2%. 

Shares of Oclaro (OCLR) jumped nearly 28% closed at 10.01 after laser and optical fiber specialist Lumentum Holdings said it would buy the optical components producer for $1.7 billion. Lumentum's shares rose 5.5% .

Micro chip giant Micron Technology (MU) surged nearly 9% followed by the coverage report Nomura Instinet. It raised its 12-month price target for the memory chip maker to $100 from $55.

The bullish call represents about an 83% upside to MU’s latest close and marks the highest price target out of the 26 research firms that cover the company. 

Netflix Inc (NFLX) shares price dipped over 3%, last traded at 321.30 after opening at a new all-time high.

This slip might simply mean investors wanted to grab some profits, but it seems more likely that a tweet from infamous short-seller Citron Research caused Netflix's intraday slump.

Europe: The main European stock markets finished mostly higher as markets in the region tried to shake off concerns surrounding tariffs and focus on the positive trading seen in individual stocks. UK's FTSE down 9 points and Germany's Dax closed higher +71 points. 

Utilities held the top spot in sector gains by the close following news that RWE was to sell 76.8% of its Innogy arm to rival E.On (OMPP). This "win-win" decision sent Innogy (IGY) shares to the top of the, finishing up 12.1% to EUR 38.70, while RWE came in second, jumping 9.25% to EUR 19.65, and E.On rose 5.4% to EUR 8.478.

UK telco provider Inmarsat (ISAT) sank 5.3% closed at GBp 409.70 – a new 52 week low, after CFRA Research cut its price target on the stock. 

The news added pressure to telecoms, which closed lower as a sector. This comes after the company reported earnings last week.

Hong Kong: Hang Seng Index (HSI) surpassed 50MA closed at 31,594 point, advanced 1.93%, up nearly 600 points as energy and tech names led broad-based gains. Index heavyweight Tencent was up 2.9% ahead of the market close. 

Tencent (700.HK) was back in the spotlight, share price soared $13, last traded at 460.00 following its investment in Xinli Media with over RMB3.3 billion. 

TENCENT's investment in leading broadcast platforms in Mainland China not only improves deployment of game ecological chain, but also demonstrates recognition and appreciation of upstream operators on content promotion effect of downstream broadcast platforms.

China Insurance Regulatory Commission (CIRC) released data for January 2018. Ping An (2318.HK) Life Insurance topped the industry as its premium scale surpassed China Life Insurance for the fourth month. 

During January, premiums of Ping An Life Insurance grew 31.5% yearly; whereas that of China Life (2628.HK) reduced 24% yearly. Share prices were up 2.6% to 86.80 and 0.8% to 23.40 respectively.

Blue chips were in uptrend. Chinese banks CCB (939.HK) and ICBC (01398.HK) surged 3.6% and 2.4%, while CM Bank (3968.HK) rallied 2.3% as CICC expects Mainland Banks 2017 net profit to rise 4.6%.

 The US CPI numbers will be the next driver for global markets. Photo: Shutterstock


– Edited by Adam Courtenay

This report was compiled by the Saxo APAC Sales trading team in Singapore – the home of social trading. Follow the team on @SaxoStrats or post your comment below to engage with Saxo Bank's social trading platform. Follow us on @SaxoStrats on Twitter

All material contained herein is provided for your general information. The information and commentaries are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Saxo Capital Markets Pte. Ltd. (“SCM SG”). Any expression of opinion (which may be subject to change without notice) is personal to the presenter and/or author; they do not reflect the view or opinion of SCM SG or its affiliates, neither do they constitute an endorsement of SCM SG’s view or analysis of the same.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. SCM SG does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment based on any commentaries or information provided here.
For further information, please click here.  

Saxo Capital Markets Pte Ltd ("Saxo Capital Markets") is a licensed subsidiary of Saxo Bank A/S, an online trading and investment specialist. Saxo Capital Markets serves as the APAC headquarters and holds a capital markets services licence under the Monetary Authority of Singapore; and a commodity broker licence issued by the International Enterprise Singapore. Clients can trade Forex, CFDs, Stocks, Futures, Options and other derivatives via SaxoWebTrader and SaxoTrader, the leading multi-asset online trading platforms.
Trading risks are magnified by leverage - losses can exceed your deposits. Trade only after you have acknowledged and accepted the risks. You should carefully consider whether trading in leveraged products is appropriate for you based on your financial circumstances. Please consider our Risk Warning and General Business Terms before trading with us. Please see full General Disclaimer.

Thousands of serious traders receive free news and analysis from Saxo Capital Markets each day. Saxo Capital Markets never sends these emails unsolicited; they are sent following acceptance of your membership and subscription request by Saxo Capital Markets at If you do not wish to receive any emails from Saxo Capital Markets in the future, please reply to this email with the word "UNSUBSCRIBE" in the subject header.

Copyright | Disclaimer | Risk Warning | Privacy Policy | Contact Us
Samsung Hub | 3 Church Street | # 30-01 | Singapore 049483
Company No. 200601141M

Relevant articles for you


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