European Open Market Briefing – 03/11/2017 – by Arjun Lakhanpal

November 3, 2017 by

In Asian Equity Markets Japan’s Nikkei index extended its strong rally to top a new 21-year peak on Thursday, ahead of a long weekend, with investors piling into miners and companies such as Honda Motor and Sony on robust earnings prospects. The Nikkei ended up 0.5 percent at 22,539.12 after reaching a high of 22,540.25, its best close since late June 1996. The broader Topix gained 0.4 percent to 1,794.08.  MSCI’s broadest index of Asia-Pacific stocks outside Japan inched up 0.1 percent, to be just a whisker from its highest since late 2007. Australia’s main index firmed 0.4 percent, while China’s blue chips were 0.5 percent lower.

In Currency Markets the dollar held steady versus a basket of currencies on Friday, as investors shifted their focus to U.S. jobs data, with President Donald Trump’s nomination of Federal Reserve Governor Jerome Powell to be the next Fed chair coming as no surprise. Against the yen, the dollar eased 0.1 percent to 114.00 yen, trading below a 3-1/2 month high of 114.45 yen that had been set last Friday. The euro held steady at $1.1659.  Sterling inched up 0.1 percent to $1.3070, after having tumbled 1.4 percent on Thursday. The BoE voted 7-2 to increase its benchmark Bank Rate to0.50 percent from 0.25 percent. The Australian dollar fell 0.4 percent to $0.7687, coming under pressure after data showed that retail sales were flat in September.

In Commodities Markets  oil prices edged up on Thursday, steadying near two-year highs as the outlook remained upbeat as OPEC-led supply cuts have tightened the market and drained inventories.  Brent crude settled up 0.2 percent, at $60.62 per barrel. The benchmark hit $61.70 on Wednesday, its highest intraday level since July 2015. U.S. crude ended 0.4 percent, higher at $54.54, almost 30 percent above its 2017-lows in June. Spot gold edged up 0.1 percent to $1,276.56 per ounce and was on track for its first weekly gain in three. In other precious metals, spot silver inched up 0.2 percent to $17.11 an ounce, platinum eased 0.4 percent, to $921.50 and palladium was up 0.3 percent to $999.33.

In US Equity Markets the Dow climbed to a record high on Thursday while losses in Facebook kept the S&P 500 and the Nasdaq in check as investors assessed the long-awaited tax cut plan unveiled by U.S. President Donald Trump’s fellow Republicans. The Dow Jones Industrial Average rose 0.35 percent, to 23,516.26, the S&P 500 gained 0.02 percent, to 2,579.85 and the Nasdaq Composite lost 0.02 percent, to 6,714.94. Facebook shares fell 2.0 percent as investors shrugged off strong quarterly results and worried about the social media company’s spending. Tesla Inc shares fell 6.8 percent after the carmaker pushed back its production target for its Model 3 sedan and reported its biggest quarterly loss ever.

In Bond Markets U.S. Treasuries were little changed on Thursday after President Donald Trump nominated Federal Reserve Governor Jerome Powell to head the Federal Reserve, as expected, and prices ended the day higher. Benchmark 10-year notes gained 7/32 in price to yield 2.35 percent, down from 2.38 percent on Wednesday. The yield curve between five-year notes and 30-year bonds flattened to as low as 82.1 basis points, the lowest level since late 2007.

Economic Calendar

  • 10:30 GMT+0 UK Services PMI
  • 13:30 GMT+0 CAD Employment Change
  • 13:30 GMT+0 CAD Trade Balance
  • 13:30 GMT+0 CAD Unemployment Rate
  • 13:30 GMT+0 US Average Hourly Earnings m/m
  • 13:30 GMT+0 US Non-Farm Employment Change
  • 13:30 GMT+0 US Unemployment Rate
  • 15:00 GMT+0 US ISM Non-Manufacturing PMI