Video

Playlist: Euronext Amsterdam

Show less
Video / 18 October 2017 at 7:26 GMT

From the Floor: Sterling at a crossroads, China in focus — #SaxoStrats

#SaxoStrats
   • Fed chair speculation continues to animate USD trade
   • EURGBP trading up to interesting 0.90 level
   • Xi Jinping speech criticises housing speculation, points to economic risks
   • Industrial metals lower, copper 'needs to hold 3.16': Hansen
   • Spanish bonds in focus on rumours of Catalan declaration of independence
   • Chipmaker ASML disappoints on Q4 earnings, quant model negative

SaxoStrats
By Michael McKenna

Volatility remains low across global FX markets, reports Saxo Bank head of forex strategy John J Hardy, but one pair that appears to be primed for a move is EURGBP where sterling is weakening against the common currency.

"The 0.90 area is key for EURGBP," says Hardy, adding that a break of this levekl could lead to further weakness in GBP.

EURGBP currently trades at 0.8923.

The US dollar found a bid on speculation that president Trump currently favours the hawkish Stanford University economist John Taylor for Federal Reserve chair, with the latest reports stating that Trump intends to announce the replacement for current chair Janet Yellen ahead of his November 3 trip to China.

EURGBP:
EURGBP

Create your own charts with SaxoTraderGO click here to learn more

Source: Saxo Bank 

From Beijing, the 19th Communist party Congress is now underway with Chinese president Xi Jinping out overnight with a three-hour speech that took aim at housing speculation and outlined short-term concerns over the Chinese economy.

The speech did little to sway the Chinese yuan, but Saxo Bank head of commodity strategy Ole Hansen says that it is currently weighing on industrial metals with high-grade copper moving down towards an interesting level.

"The 3.16 line needs to hold in copper," says Hansen, adding that a further move lower to 3.12 is possible if this level is breached.

Oil is maintaining its bid on Iraqi forces' determined retaking of Kurdish territory in the country's divided north, with Tuesday's API report, which showed a greater-than-expected inventories draw, providing support ahead of today's release from the Energy Information Administration.

Saxo's head of commodity strategy cautions, however, that last week's API data failed to match up with the EIA numbers across the board.

Finally, Saxo Bank head of fixed income strategy Simon Fasdal cautions traders to keep an eye on 10-year Spanish bonds on widespread rumours that Catalan authorities may be preparing a declaration of independence despite Madrid's moving in to declare the region's secession referendum illegitimate and arresting several alleged protest organisers.

For more on European bonds, gold, crude oil, US earnings and the upcoming Czech and Japanese elections, listen to today's Morning Call in its entirety via the above video link.

Into the European bell, Saxo Bank head of equity strategy Peter Garnry says that the German Dax index continues to surge while in single shares, chipmaker ASML disappointed with lower guidance while maintaining its fiscal year outlook.

Beijing
All eyes are on Beijing for word from the 19th Party Congress. Photo: Shutterstock

Michael McKenna is senior editor at Saxo Bank

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 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