European Open Market Briefing – 05/09/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei index fell to a one-week low in choppy trade on Tuesday morning as geopolitical tensions over North Korea sapped risk appetite, while index-heavyweight Fast Retailing Co fell on weak sales. The Nikkei shed 0.4 percent to 19,431.02 in midmorning trade, after initially opening slightly higher. The broader Topix shed 0.5 percent to 1,595.59 and the JPX-Nikkei Index 400 lost 0.4 percent to 14,152.79. MSCI’s index of Asia-Pacific stocks outside Japan was up 0.2 percent thanks to gains in Chinese shares, though many markets were in the red. The Shanghai Composite rose 0.20 percent, while the Hang Seng Index in Hong Kong gained 0.22 percent.

In Currency Markets the dollar decreased against the Japanese yen and Swiss franc on Tuesday as global tensions simmered amid signs that North Korea could conduct more missile tests. The U.S. currency was down 0.4 percent at 109.335 yen, nearing a low of 109.220 hit the previous day in a knee-jerk reaction to North Korea’s hydrogen bomb test on Sunday. The Swiss franc advanced 0.2 percent at $0.9548 franc per dollar, adding to gains from Monday, when it rose 0.7 percent. The euro gained 0.15 percent to $1.1907, edging back towards Monday’s high of $1.1922. Against a broadly sagging greenback the Australian dollar was up 0.25 percent at $0.7962, edging back towards a one-month high of $0.7997 set on Friday.

In Commodities Markets  U.S. oil prices edged up on Tuesday as the gradual restart of refineries in the Gulf of Mexico that were shut by Hurricane Harvey raised demand for crude, their main feedstock. U.S. West Texas Intermediate crude futures were at $47.41 barrel, up 0.3 percent, from their last settlement. Brent crude futures lost 0.4 percent, to $52.15 a barrel. Gasoline futures fell 3.5 percent from their last close, to $1.68 per gallon, down from $2.17 a gallon on Aug. 31.  Spot gold rose 0.1 percent to $1,335.76 per ounce. Silver fell 0.3 percent to $17.84 an ounce, while platinum was nearly unchanged at $1,006.35 an ounce. Palladium was up 0.1 percent at $977.60.

In U.S., Equity Markets were closed for the Labor Day holiday. 

In Bond Markets Japanese government bond prices edged lower on Tuesday with an auction for 10-year debt drawing lukewarm demand from investors. The 10-year JGB yield was half a basis point higher at minus 0.005 percent. The 10-year yield had declined below zero percent over the past week for the first time since mid-November as tensions in the Korean Peninsula have generated safe-haven bids for government debt.

Economic Calendar

• 09:30 GMT+1 UK Services PMI
• 10:10 GMT+1 AUD RBA Gov Lowe Speaks