European Open Market Briefing – 05/05/2017 – by Arjun Lakhanpal

May 5, 2017 by

In Asian Equity Markets stocks declined for a third consecutive day on Friday as fresh falls in commodities raised concerns about the health of the global economy, though the euro bucked the broad weakness on receding concerns about France’s presidential election. MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.4 percent on Friday and was trading at its lowest level since April 25. Hong Kong led regional losers with losses of 0.8 percent in opening trades. Australian stocks fell 0.5 percent with metals and mining related stocks leading the decline. Japan and South Korea markets are closed for trading.

In Currency Markets the Canadian dollar set a 14-month low and the Australian dollar hit a four-month trough as oil prices slid on Friday, while the safe haven yen edged higher as risk sentiment wavered. The Canadian dollar fell to C$1.3790 per U.S. dollar at one point, its weakest level since late February 2016. The loonie was last down 0.3 percent at C$1.3786. The Australian dollar slid to $0.7372 at one point, its lowest level since Jan. 11, last trading at $0.7381, down 0.4 percent on the day. The dollar fell 0.3 percent against the yen to 112.19, pulling away from a seven-week high of 113.045 yen set on Thursday. The euro last traded at $1.0985, little changed on the day but up 0.8 percent for the week.

In Commodities Markets oil prices fell by as much as a further 3 percent on Friday, after prices had crashed to five-month lows in the previous session, as concerns about global oversupply wiped out all of the price gains since OPEC’s move to cut output. U.S. West Texas Intermediate crude oil futures were trading at $44.14 per barrel, down 3 percent, after a more than 4 percent decline the previous session. Brent crude futures were at $47.05 per barrel, down 2.8 percent from their last close.  Spot gold rose 0.1 percent to $1,228.17 per ounce. Spot silver rose 0.1 percent to $16.30, after hitting a four-month low of $16.17 in the last session. Platinum was up 0.1 percent at $900.10 and palladium fell 0.4 percent to $800.95

In US Equity Markets stocks  ended flat on Thursday as a steep fall for the energy sector countered some solid earnings reports, with major stock indexes closing little changed after the U.S. House of Representatives passed a healthcare overhaul. The Dow fell 0.03 percent, to 20,951.47, the S&P 500 gained 0.06 percent, to 2,389.52 and the Nasdaq Composite added 0.05 percent, to 6,075.34. The energy sector fell 1.9 percent, easily the worst performing group. Exxon Mobil’s 1.3-percent decline and Chevron’s 1.8-percent decrease weighed on the S&P. Tesla fell 5 percent after the electric automaker’s quarterly net loss widened. In the healthcare sector, Regeneron rose 6.7 percent and Zoetis rose 5.9 percent after their respective results.

In Bond Markets U.S. Treasury yields rose on Thursday after strong labor data reinforced expectations the Federal Reserve was likely to raise interest rates again in June, and as investors waited on Friday’s highly anticipated jobs report for April. Benchmark 10-year notes fell 13/32 in price to yield 2.36 percent, their highest since April 10, and up from 2.31 percent late on Wednesday.

Economic Calendar

  • 13:30 GMT+1 CAD Employment Change
  • 13:30 GMT+1 CAD Unemployment Rate
  • 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
  • 18:30 GMT+1 US Fed Chair Yellen Speaks