European Open Market Briefing – 07/06/2017 – by Arjun Lakhanpal

June 7, 2017 by

In Asian Equity Markets Japan’s Nikkei index fell on Wednesday morning as investors continued to shun riskier assets ahead of potentially market moving global events this week. The Nikkei lost 0.2 percent to 19,931.43 points by midmorning. The broader Topix shed 0.1 percent to 1,594.31 and the JPX-Nikkei Index 400 declined 0.2 percent to 14,212.56. MSCI’s broadest index of Asia-Pacific stocks outside Japan crept up 0.1 percent, with Hong Kong and mainland China stocks leading the region higher. Hong Kong’s Hang Seng Index however gained 0.15 percent and the Shanghai Composite eased 0.22 percent.

In Currency Markets the dollar wallowed near a six-week low against the safe-haven yen on Wednesday, with traders cautious ahead of Britain’s general election, a ECB policy decision and testimony by former FBI Director James Comey. The greenback treaded water at 109.490 yen, not far from 109.225, its lowest since April 21 fell overnight. The euro was little changed at $1.1267 and the pound was 0.1 percent lower at $1.2900. The Australian dollar added 0.45 percent to reach a one-month high of $0.7544 after data showed the resource-rich economy grew 0.3 percent in the first quarter, dousing fears that its record expansion may have ended.

In Commodities Markets oil prices fell on Wednesday, with Brent crude futures around $50 per barrel, as global fuel markets remained oversupplied, although rising tension in the Middle East and falling U.S. inventories lent some support. Brent crude futures were trading at $50.05 per barrel, down 7 cents from their last close. U.S. West Texas Intermediate crude futures were at $48.13 per barrel, down 6 cents from the previous close. Spot gold fell 0.1 percent to $1,291.66 per ounce. Among other precious metals, spot silver gained 0.1 percent to $17.68, platinum fell 0.2 pct to 954.40, and palladium was up 0.1 pct at $854.30.

In US Equity Markets  major stock indexes ended near session lows on Tuesday as traders shied away from risky assets ahead of major political and economic headlines expected on Thursday. The Dow Jones Industrial Average fell 0.23 percent, to 21,136.23, the S&P 500 lost 0.28 percent, to 2,429.33 and the Nasdaq Composite fell 0.33 percent, to 6,275.06. The largest weight on the S&P 500 was Amazon, down 0.8 percent. Walmart  fell 1.7 percent after Amazon said it would offer its Prime subscription service at a discount to U.S. customers on government aid, taking aim at a piece of Walmart’s customer base. Macy’s lost 8.2 percent after it warned its margins could shrink further.

In Bond Markets short-end Japanese government bond prices sagged on Wednesday due to oversupply concerns while risk aversion gripping the broader financial markets lifted longer-dated maturities. The two-year JGB yield rose 2.5 basis points to minus 0.120 percent, its highest since mid-November. The 20-year yield fell 1 basis point to 0.545 percent and the 30-year yield declined 0.5 basis point to 0.800 percent.

Economic Calendar

  • 15:30 GMT+1 US Crude Oil Inventories