European Open Market Briefing – 05/06/2017 – by Arjun Lakhanpal

June 5, 2017 by

In Asian Equity Markets Japan’s Nikkei index barely moved on Monday, capped by a stronger yen but retaining enough momentum to stay close to a 22-month high scaled the previous session. The Nikkei was up 0.1 percent at 20,197.80. after falling earlier to 20,104.13. The broader Topix was down 0.2 percent at 1,609.24 and the JPX-Nikkei Index 400 fell 0.25 percent to 14,349.48. Chinese stocks  fell 0.5 percent, with news of service-sector activity rising in May at the fastest pace in four months failing to lift sentiment. Australian stocks slid 0.8 percent and South Korea’s KOSPI was little changed.

In Currency Markets the dollar edged up on Monday, but remained not far from the seven-month low it plumbed against a currency basket after disappointing U.S. employment data prompted investors to pare back expectations of U.S. Federal Reserve rate hikes. The dollar added 0.2 percent against the yen to 110.57 after brushing a two-week low of 110.25 earlier in the session, while the euro fell 0.2 percent to $1.1265 after rising to a seven-month high of $1.1285. Sterling fell, under pressure after the third terrorist attack in Britain in less than three months killed at least seven people on Saturday. The pound shed 0.2 percent to $1.2868. The dollar index edged up 0.1 percent to 96.798, not far from Friday’s nadir of 96.654, its lowest since Nov. 9.

In Commodities Markets  oil markets rose more than 1 percent on Monday, pushed up by tensions in the Middle East where top crude exporter Saudi Arabia and other Arab states cut off ties with Qatar, and as signs of falling OPEC supplies tightened the market.  Brent crude oil futures rose 1.3 percent, to $50.62 per barrel. U.S. West Texas Intermediate futures were at $48.31 a barrel, up 1.4 percent. Spot gold had climbed 0.1 percent to $1,280.74 per ounce. It hit a peak of $1,281.95 an ounce early in the session, its strongest since April 21. Among other precious metals, silver hit a high of $17.585 an ounce early in the session, its strongest since April 26. Platinum was down 0.6 pct at $946.10.

In US Equity Markets  stocks closed at record levels for a second consecutive session on Friday, as gains in technology and industrial stocks more than offset a lukewarm jobs report. The Dow Jones Industrial Average rose 0.29 percent, to 21,206.29, the S&P 500 gained 0.37 percent, to 2,439.07 and the Nasdaq Composite added 0.94 percent, to 6,305.80. Industrials, up 0.49 percent, and technology, up 1.04 percent, were the best performing sectors. The tech sector was led by Broadcom, which rose more than 8 percent to hit an all-time high of $253.76, after the chipmaker’s quarterly results beat analysts’ expectations. Lululemon Athletica jumped 11.5 percent after the athletic apparel maker’s quarterly profit beat estimates.

In Bond Markets U.S. benchmark and long-dated Treasury yields fell to nearly seven-month lows, and short-dated yields touched their lowest in more than two weeks on Friday after weaker-than-expected U.S. employment data suggested cautious Federal Reserve policy beyond June. Benchmark 10-year yields hit 2.144 percent, and 30-year yields reached 2.799 percent, their lowest since Nov. 10. U.S. seven-year Treasury yields hit 1.954 percent, a roughly 6-1/2-month low.

Economic Calendar

  • 09:30 GMT+1 UK Services PMI
  • 09:30 GMT+1 US ISM Non-Manufacturing PMI