European Open Market Briefing – 02/06/2017 – by Arjun Lakhanpal

June 2, 2017 by

In Asian Equity Markets Japan’s Nikkei index broke through the 20,000-point barrier for the first time since December 2015 on Friday after a batch of strong U.S. economic data lifted Wall Street and the U.S. currency against the yen. The Nikkei swept through 20,000 in early trade making a 1.3 percent advance to 20,115.23, its highest level since August 2015. The index was poised to post weekly gains of 2.1 percent. MSCI’s broadest index of Asia-Pacific stocks outside Japan gained 0.6 percent. Hong Kong’s Hang Seng Index rose 0.41 percent, but the Shanghai Composite eaed 0.26 percent.

In Currency Markets the dollar hit a one-week high against the yen on Friday after upbeat U.S. private sector job figures, while the closely-watched non-farm payrolls report out later in the global day could provide another boost. The dollar hit 111.680 yen, its highest since May 26, in early trade before falling back to 111.580, to hold a 0.2 percent gain on the day. The euro was little changed at $1.1217 after losing 0.3 percent the previous day. The Australian dollar was 0.2 percent higher at $0.7388, taking back some ground following its sharp slide on Thursday. The New Zealand dollar was 0.1 percent higher at $0.7072 after it was also hit by the lacklustre Chinese numbers.

In Commodities Markets oil prices fell on Friday amid worries that U.S. President Donald Trump’s decision to abandon a global climate pact could spark more crude drilling in the United States, stoking a persistent glut in global supply. Global benchmark Brent crude futures were down 0.45 percent, at $50.4 a barrel. U.S. West Texas Intermediate crude futures lost 0.54 percent, to $48.1 per barrel. Crude stockpiles were down to 6.4 million barrels in the week to May 26, beating analyst expectations for a decrease of 2.5 million barrels.  Spot gold lost 0.3 percent to $1,260.96 per ounce. Among other precious metals, silver was down 0.9 pct for the week and platinum 2.8 percent.

In US Equity Markets  stocks advanced on Thursday, with each of the major U.S. indexes notching record highs, after a batch of economic data suggested the economy was picking up speed. The Dow Jones Industrial Average rose 0.65 percent, to end at 21,144.18, the S&P 500 gained 0.76 percent, to 2,430.06 and the Nasdaq Composite added 0.78 percent, to 6,246.83. Deere’s shares were up 1.8 percent after the farm and construction major said it would buy privately held German road construction company Wirtgen Group for $5.2 billion, including debt. Hewlett Packard Enterprise lost 6.9 percent after the company reported a steep fall in quarterly revenue.

In Bond Markets Japanese government bond prices fell on Friday as Tokyo stocks rose to a near two-year high and diminished the appeal of safe-haven debt. The benchmark 10-year JGB yield was up half a basis point at 0.055 percent, its highest since April 10. The 30-year yield also rose half a basis point, to 0.815 percent. The benchmark 10-year Treasury yield was marginally higher at 2.22 percent, but was still a long way from this year’s high above 2.60 percent seen in March.

Economic Calendar

  • 09:30 GMT+1 UK Construction PMI
  • 13:30 GMT+1 CAD Trade Balance
  • 13:30 GMT+1 US Average Hourly Earnings m/m
  • 13:30 GMT+1 US Non-Farm Employment Change
  • 13:30 GMT+1 US Unemployment Rate