Saxo Morning Call

Commodities hammered by trade tariffs

Clare MacCarthy
Senior Editor, Saxo Bank

The week ends on a sour note for commodities after US president Donald Trump signed off on his controversial tariffs on steel and aluminium, allowing them take effect in 15 days' time. Although Canada and Mexico have won temporary exemptions (while NAFTA negotiations continue), industrial metals are taking a beating and prices are down more than 10% on the week, says Ole Hansen, Saxo's head of commodity strategy. 

"The trade talks and global tensions have really had an impact on commodities, especially industrial metals, which have dropped to their lowest since September," he says. Crude oil, gold, and copper are all suffering too for various reasons and are looking for support as the week draws to a close.

But the big focus today for commodities as well as virtually every other asset is the US nonfarm payrolls update for February and specifically, the data for average hourly earnings. "Today's US data is really important for seeing if the current USD uptick can sustain," says John J Hardy, Saxo's head of FX strategy. The consensus expectation is for a gain of 0.2% month-on-month and a 2.8% rise year-on-year. "A disappointment in either direction could be significant," Hardy says.

Peter Garnry, Saxo's head of equity strategy, says that ADP data have already indicated that the February payrolls numbers will be strong. "The deep link in the market right now – whether it's true or not – is the way investors are linking the interest rate trajectory to the wage numbers," he says.

And what of the pictures of Trump and Kim Jong Un that are dominating the front pages of the world's newspapers this morning? Well, Saxo's Hardy calls the planned meeting between the two leaders as "really unprecedented stuff" and "pretty high stakes" but points out that "the market effect is questionable even though the immediate response is risk-off". While the North Korean offer to meet could give Trump his "Nixon in China moment" there's much potential for things to unravel even before they begin...


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. 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 Saxo News & Research 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 Saxo News & Research 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 Saxo News & Research or as a result of the use of the Saxo News & Research. 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. Saxo News & Research 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 (
Full disclaimer (

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.