TV

Ole Hansen
While WTI crude has continued to be on the defensive, Brent has been trading upwards with potentially the best month since May 2009. Natural gas has also had two stories to tell this week - in the US it's fallen 9% while UK gas is up around 5%. Saxo's Ole Hansen looks at this week's divergence plus gold.
Article / 07 February 2013 at 17:14 GMT

TradingFloor.com highlights: Dovish ECB sends Euro into nosedive

Editor / Saxo Capital Markets UK
United Kingdom

MACRO: Dovish Draghi in difficult balancing act

Steen

Steen Jakobsen, Chief Economist at Saxo:

“Mario Draghi, the president of the European Central Bank (ECB), was more dovish than most market participants had expected in his comments following the bank’s monetary policy meeting on Thursday which left interest rates unchanged. The market’s immediate reaction to was to send the euro tumbling by about 100 basis points against the dollar. The very difficult task facing Mr Draghi is trying to balance a very negative economic outlook with the threat that the ECB’s outright monetary transactions programme is taking the tail-risk off in terms of the peripheral interest rate. The ECB is now facing a year-on-year trend growth of minus one percent (contraction) and not a revival  and that is what Draghi is trying to balance and is the reason why we will see some sort of reaction to the euro,  not just today but over coming days as well.” 

FOREX: ECB meeting could mean highs are in for EURUSD

John

John Hardy, Head of FX Strategy at Saxo:

“The highs may be in for EURUSD after this ECB meeting, even though Mr. Draghi left much unsaid. Firmer conviction for a call that the highs are in would come with a close below 1.3300. The bottom line is this was a fairly dovish performance from Mr. Draghi, but far more for what was said between the lines than for what was said directly. Yes, the general statement saw president Draghi suggesting that inflation rates would likely fall below the 2 % target eventually and that there are downside risks in the economy, though things seemed to be stabilizing at a low level. Among the risks, the exchange rate was mentioned, and the mere mention of it as a factor saw the Euro rushing lower against the USD, JPY and GBP.” 

COMMODITIES: Brent receives a geopolitical bid from Iran

Ole

Ole Hansen, Head of Commodity Strategy at Saxo:

“Brent crude oil has been ticking higher following some tough rhetoric from Iran’s highest authority, Ayatollah Ali Khamenei, who today has rejected an offer of direct talks put forward by US Vice President Biden last week. The talks was meant to look into ways of solving the stand-off over Iran’s nuclear intentions which triggered the now months long embargo on Iranian oil from Europe and US. With Brent receiving a geopolitical bid the spread to WTI crude has widened again, currently trading up to 20.7 USD/barrel. Next level of resistance on Brent crude will be the September high at 117.95 USD/barrel.”

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com 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 Tradingfloor.com 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 Tradingfloor.com 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 Tradingfloor.com or as a result of the use of the Tradingfloor.com. 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 Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com 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 our trading 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 Investment Research
- Full disclaimer

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