European Open Market Briefing – 12/09/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japanese stocks climbed to near their highest in a month on Tuesday with all sectors rising after Wall Street rose overnight. The Nikkei rose 1.0 percent to 19,742.54 in midmorning trade, after hitting as high as 19,767.65, the highest level since Aug. 16. The broader Topix added 0.9 percent to 1,626.08, with all of its 33 subsectors in positive territory. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.2 percent to its highest level since late 2007. In Australia, the S&P/ASX 200 rose 0.72 percent. The Shanghai Composite was up 0.07 percent, while the Kospi in South Korea posted 0.12 percent gain.

In Currency Markets the dollar held to large gains on Tuesday following a sharp rebound against the yen and euro, lifted by improving investor risk sentiment as worries over North Korea and Hurricane Irma receded. The dollar was steady at 109.345 yen after rallying 1.4 percent overnight, its biggest one-day rise since mid-January. The euro was little changed at $1.1962 after shedding 0.7 percent overnight. The Swiss franc, often sought in times of global risk aversion along with the yen, was flat at 0.9558 per dollar. The pound was effectively flat at $1.3172 after losing 0.25 percent on Monday. The Australian dollar was 0.05 percent lower at $0.8022 , extending its retreat from a two-year peak of $0.8125 scaled on Friday.

In Commodities Markets oil prices edged down in early Asian trading on Tuesday, as traders weighed up the dampening effect on demand of Hurricane Irma versus refinery restarts in the wake of Hurricane Harvey that should lead to more crude oil processing. International benchmark Brent crude was down 0.1 percent, at $53.79 per barrel from the previous close. U.S. West Texas Intermediate crude was down 0.1 percent, at $48.03 a barrel. Spot gold had edged 0.1 percent lower to $1,325.56 an ounce. In the previous session, it lost 1.4 percent in its biggest one-day percentage decline since early July. U.S. gold futures for December delivery were down 0.4 percent at $1,330.00 an ounce.

In US Equity Markets  the S&P 500 rose over 1 percent to a record high close on Monday as tropical storm Irma caused less damage than expected in Florida, and after North Korea did not test-fire missiles over the weekend, which some had feared. The Dow Jones Industrial Average  rose 1.19 percent to end at 22,057.37, the S&P 500 gained 1.08 percent to 2,488.11 and the Nasdaq Composite added 1.13 percent to 6,432.26. The S&P 500 financial index jumped 1.74 percent, with JPMorgan up 2.18 percent and insurer Travelers up 2.34 percent. Apple  rose 1.81 percent a day ahead of the expected launch of a new iPhone. Tesla jumped 5.91 percent on news that China was studying when to ban the production and sale of cars using traditional fuels.

In Bond Markets  the benchmark 10-year Japanese government bond yield rose to a three-week high on Tuesday as risk aversion that had gripped the broader markets eased, curtailing demand for safe-haven debt. The 10-year JGB yield was up 3 basis points at 0.025 percent, its highest since Aug. 24. The five-year JGB yield was 2.5 basis points higher at minus 0.120 percent. December 10-year JGB futures fell 0.28 point to 150.92. The 10-year U.S. Treasuries yield jumped to 2.129 percent from 2.061 percent, the biggest rise in a month and a half.

Economic Calendar

• 09:30 GMT+1 UK CPI y/y