Article / 12 March 2018 at 23:51 GMT

Today's Trade: Wall St weakness weighs on S&P/ASX200, US CPI in focus

Trading Desk / Saxo Capital Markets
  • Uncertainty over the impact of Trump's metals tariffs weighed on Wall St
  • The Dow Jones Industrial Average snapped a two-session winning streak
  • Inflation data has jolted stock and bond prices in recent days
  • Investors are vigilant for more clues on price pressures
  • Bulk commodities are under pressure due to fears of a full-blown trade war
By Saxo Capital Markets Australia

Watch the recording of this Week’s Macro Monday call here.

Overnight and early trading
  • The S&P/ASX200 edged lower in early trading. The benchmark index was down 0.032% to 5,994.20 at 1002 AEDT (2302 GMT, on Monday evening).
  • U.S. stocks finished the day lower as uncertainty over the prospect of tariffs undid some of the market’s recent job-driven advances and investors looked forward to Tuesday’s U.S. inflation report. Treasuries increased, while the dollar and most commodities fell.
  • The Dow Jones Industrial Average fell on Monday, snapping a two-session winning streak, as shares of industrial giants slumped.


A Ryanair Boeing 737-800 boards passengers in Bratislava ... Wall St has pushed shares in Boeing down by nearly 5% on fears that retaliation against Trump's tariffs will create headwinds for US exporters. Photo: Shutterstock

  • Boeing, Caterpillar and United Technologies were the biggest drags on the blue-chip index as investors continue to assess the Trump administration’s plan to impose tariffs on steel and aluminum imports.
  • A strong earnings season alongside recent inflation data have buoyed major stock indexes in recent days. But some analysts said they were wary of being in a later part of the economic cycle, one in which the overarching interest-rate environment is shifting and inflation-rate worries that rattled markets in February could return.
  • Recent economic data and geopolitical news have triggered market volatility, and analysts said the calm permeating much of 2017 was likely gone.
  • Some pointed to a lack of news on the trade front as a supportive factor for stocks in the short term. U.S. and European officials are planning new trade talks as U.S. allies seek ways to avoid the steel and aluminum tariffs. A broader escalation of trade tensions remains a risk for investors, analysts said.
  • The Dow industrials dropped 157.13 points, or 0.6%, to 25178.61. The S&P 500 swung between small gains and losses, ending the day down 3.55 points, or 0.1%, at 2783.02. The Nasdaq Composite climbed 27.51 points, or 0.4%, to 7588.32, setting a record close for the second consecutive session and extending its winning streak to seven trading days.
  • Industrial stocks were the biggest decliners in the S&P 500, down 1.2%. Boeing dropped $10.33, or 2.9%, to $344.19. Caterpillar fell 3.75, or 2.4%, to 154.50, and United Tech declined 2.57, or 1.9%, to 131.50. The energy sector also weakened as crude prices slumped.
  • Inflation data have jolted stock and bond prices in recent days, and investors said they would be monitoring consumer-price index data from the US Labor Department on Tuesday for more clues on price pressures.
  • Inflation chips away at the purchasing power of government bonds, leading to declines in Treasury prices. This, in turn, could make government bonds more attractive relative to stocks, leading some investors to reallocate cash. Inflation rising at a faster rate could also lead the Federal Reserve to accelerate its pace of raising rates.
  • Stocks got a boost after Friday’s U.S. jobs report showed that despite an increase in hiring, wage growth slowed in February while the annual wage gain in January—which initially sparked the jitters that led to the market’s worst selloff in more than two years—was revised lower.
  • Elsewhere, the Stoxx Europe 600 edged up 0.3% amid a flurry of merger news, echoing a climb in stocks across Asia.
  • Source: Bloomberg,,, CNBC
Local markets
  • Bank of New York Australia ADR Index is unchanged at 277.2, BHP Billiton ADRs are up 0.4% to $A28.84 equivalent, a 0.2% discount to last Sydney close, Rio Tinto ADRs are up 0.3% to $A66.28 equivalent, a 12.2% discount to last Sydney close
  • Gold prices dipped on Monday as the previous session's upbeat U.S. payrolls data sparked a fresh rally in equities, shoring up expectations that the Federal Reserve would press ahead with further interest rate rises this year. Spot gold lost 0.09% at $1,322.46/oz, while U.S. gold futures for April delivery settled down $3.20, or 0.2%, at $1,320.80 per ounce. "We are now getting within distance of the FOMC next week, with the rate hike being expected to be executed," Saxo Bank's head of commodity research Ole Hansen. "We've seen in the past that gold has been struggling ahead of these announcements, so I think we're just being sucked into the slipstream of that meeting." Gold stocks in Toronto added 1.44% overnight. Gold stocks: GOR, NCM, NST, AQG, EVN, KCN, RMS, RRL, SAR, SLR.
  • Oil fell on speculation that growing shale production will stem the drawdown of inventories from the biggest U.S. hub. West Texas Intermediate futures dropped 1.1% after a government report showed further expansion in shale output. Output from major U.S. shale regions is forecast to rise 131,000 barrels a day in April, government data show. Stockpiles in Cushing, Oklahoma, the delivery point for futures contracts, were little changed after 11 straight weeks of declines, according to a Bloomberg forecast. The spread between April and May futures narrowed to 3 cents. The spread between the first two WTI contracts has settled in backwardation, where prompt prices are higher than those for later delivery, every day since January 22. Inventories at Cushing have fallen by more than half since November to the lowest since December 2014.
  • WTI for April delivery fell 68 cents to settle at $61.36/barrel on the New York Mercantile Exchange, after gaining $1.92 on Friday. The April-May spread narrowed 9 cents to 3 cents a barrel. Brent for May settlement fell 54 cents to $64.95 a barrel on the London-based ICE Futures Europe exchange, and closed at a $3.62 premium to WTI for the same month. Output from shale regions will reach 6.95 million barrels a day in April, the Energy Information Administration said in its monthly drilling productivity report. Permian Basin production led the way with an 80,000-barrel increase. Fears over increasing U.S. production continue to weigh on producers and investors. Iran wants Opec to work to keep oil prices at about $60/b as an increase toward $70 will encourage shale oil output, the country’s Oil Minister Bijan Zanganeh said, the Wall Street Journal reported. Some of the market’s uncertainty was echoed in money managers’ short-selling position. Hedge funds boosted bets on falling WTI prices by the most this year after American production surged to record levels, according to the U.S. Commodity Futures Trading Commission. Oil stocks: WOR, WPL, STO, SEA, BPT, OSH, HZN, AWE, KAR, ORG, SXY.
  • Bulk commodities remain under pressure as concerns over a full-blown trade war continue to circulate around the market. Front month iron ore futures, both on the Dalian and Singapore exchanges, pushed close to USD70/t as steel mills sit on the sidelines amid the uncertainty over the outlook for steel markets. Their reluctance to restock after the Chinese New Year and ahead of a key demand period suggests President Trump’s tariffs are creating a level of uncertainty in the market. Spot iron ore was down 0.8% or $0.57 closing at $71.20. In company news, Anglo American’s Brazilian iron-ore operations suffered a burst pipeline Monday, leading the company to cease some mining activities as it looks into the cause of the accident, its press department says by email. Iron ore stocks: FMG, BHP, GBG, GRR, MGX, RIO, BCI, SDL.
  • On Monday, copper for delivery in May declined nearly 1% on the Comex market in New York at $3.1095 per pound or $6,855 a tonne amid a general weakness on commodity and financial markets gripped by uncertainty surrounding the Trump administration's trade policies and the strength of demand from China, the globe's number one metals consumer. Copper is now down 5.8% so far in 2018 and the bellwether metal's dimmer prospects is nowhere more evident than on derivatives markets and the shift in positioning of large-scale derivatives speculators such as hedge funds. Copper stocks: OZL, SFR.
  • Stainless steel raw material nickel ended up 4.5 per cent at $13,860, its strongest one day gain since mid-February, after LME data showed a 13 per cent slide in on-warrant stocks to 201,240 tonnes. Nickel stocks: IGO, WSA; Aluminium stock: AWC.
  • Ex-dividend: Cleanaway, News Corp, Regis Healthcare, Sims Metal.
  • Labor May End Dividend Cash Perk in $A59bn Grab If Elected: AFR.
  • EnergyAustralia Considers Naming Advisers to Work on Potential IPO: Australian.
  • ANZ Bank (ANZ), Commonwealth bank (CBA), National Australia Bank (NAB), Westpac (WBC): Australian government inquiry into banking sector begins.
  • BHP (BHP): Woodside & BHP in Agreement on Scarborough Field Development.
  • Cimic (CIM): Among Stocks Are Breaking Out of Major Technical Chart Patterns.
  • Emeco Holdings (EHL): Is Said to Have Discussed Potential Sale Options: AFR.
  • Prairie Mining (PDZ): JSW to Meet Prairie This Month, May Talk Karski Mine: Parkiet.
  • Vocus (VOC): Taps Maritana Partners to Find CEO, Directors: AFR.
Broker upgrades, downgrades
  • Credit Corp (CCP): Raised to Neutral at Evans and Partners; price target $A22.11.
  • Elders (ELD): Upgraded to Hold at Wilsons; Price Target $A6.80.
  • Fortescue (FMG): Rated New Sell at Vertical Group; PT $A2.41.
  • James Hardie (JHX): GDRs Raised to Outperform at Credit Suisse.
  • Newcrest (NCM): Downgraded to Hold at Shaw and Partners; PT $A23.
NZDUSD grinds its way higher

NZDUSD seems to be stuck in the range between 0.72 handle and 0.7435 that has been acting as a key resistance level since September last year. Ahead of the release of US CPI numbers tonight (at 2330 AEDT), commodity pairs are looking to grind higher.

A daily close above 0.73 should signal a scope for more upside moves in the near term. The major focus would be the speech from RBNZ governor Grant Spencer at 1045 AEDT.

NZDUSD chart
Create your own charts with SaxoTrader; click here to learn more

– Edited by Robert Ryan

For more on forex, click here.

Today's Trade is compiled by the Sydney trading desk at Saxo Capital Markets.

Today's Trade is brought to you by Saxo Capital Markets (Australia) Pty Ltd ABN 32 110 128 286, AFSL 280372 (Saxo Capital Markets), in association with which is the property of Saxo Bank A/S, the parent company of Saxo Capital Markets. is a social trading facility offering clients of Saxo Bank Group access to in-depth market news, commentary, analysis and much more.
The content of Today's trade should not be considered as a ‘personal’ or specific investment advice catered for your specific need, objectives or financial situation, or be construed as an express or implied promise, guarantee or implication by Saxo Capital Markets that clients will profit from the strategies expressed or that losses in connection therewith can or will be limited.
None of the information contained in the daily outlook constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy. Saxo Capital Markets; shall not be responsible for any loss arising from any investment based on any forecast or other information contained in the daily outlook. Past performance is not a reliable indicator of future performance. Information contained in this daily outlook may have previously been distributed to; and acted upon; by other clients and persons who have shown interest in Saxo Capital Markets, as well as internal affiliates/employees of Saxo Capital Markets. Any trade ideas or positions contained herein relating to products or services offered by Saxo Capital Markets may be inconsistent to trades/positions entered into by Saxo Capital Markets and/or its affiliates. Further, any information contained may consist of opinions and views of the ‘Sales Trading Desk’ as a team, however does not reflect the ‘specific’ opinion of Saxo Capital Markets.
Trades in accordance with the information contained in the daily outlook, especially, but not limited to, leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the daily outlook do not occur as anticipated. Prior to making any investment or entering into any transaction, you should carefully consider your financial situation and consult your independent financial expert in order to understand the risks involved and ensure the suitability for you of any investment or transaction decision you enter. Any information or opinions in this material are not intended for distribution to, or use by, any person in any jurisdiction or country where such distribution or use would be unlawful. Please refer to our Combined Financial Services Guide & Product Disclosure Statement available via Please also consider whether acquiring or continuing to hold financial products is suitable for you, prior to trading and investing.
If you would like to unsubscribe from the Daily Outlook, please reply ‘Opt Out’ to this email with your Client ID.
Terms & Agreement | Disclaimer | Financial Services Guide | Privacy Policy | Contact Us |


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

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