European Open Market Briefing – 06/07/2017 – by Arjun Lakhanpal

July 6, 2017 by

In Asian Equity Markets Japanese stocks edged down on Thursday morning as ongoing tensions around North Korea continued to sap risk appetite, while the retail sector underperformed on dismal earnings from convenience stores. The Nikkei fell 0.3 percent to 20,018.87 in midmorning trade, and the broader Topix shed 0.1 percent to 1,616.43.  MSCI’s broadest index of Asia-Pacific stocks outside Japan was down 0.1 percent. South Korea’s KOSPI and Australian stocks both lost 0.1 percent. China’s bluechip CSI 300 index fell 0.5 percent and Hong Kong’s Hang Seng slid 0.3 percent.

In Currency Markets the dollar steadied against its peers early on Thursday after the Federal Reserve’s policy meeting minutes took the wind out of its advance, with the market awaiting comments by central bankers and U.S. data for its next cues. The dollar was little changed at 113.240 yen, pulling back from a seven-week high of 113.690 reached overnight. The euro inched down 0.1 percent to $1.1338 following its decline to a one-week trough of $1.1313 on Wednesday. The Australian dollar was 0.1 percent lower at $0.7593. It showed little reaction to data showing that Australia’s trade surplus rebounded sharply in May. The loonie was 0.15 percent weaker at C$1.2976 per dollar.

In Commodities Markets oil prices recovered some ground on Thursday on strong demand in the United States, but analysts cautioned that oversupply would continue to drag on markets after a steep fall in the previous session. Brent crude futures were trading up 0.7 percent, at $48.13 per barrel. U.S. West Texas Intermediate crude futures were up 0.7 percent, at $45.45 per barrel. The gains reflected firm fuel demand in the United States, where data from the American Petroleum Institute (API) on Wednesday showed that U.S. crude inventories fell by 5.8 million barrels in the week to June 30 to 503.7 million. Gold prices were flat at $1,226.69 an ounce.

In US Equity Markets a  steep decrease in oil prices dragged energy stocks lower and kept the Dow and S&P 500 in check on Wednesday, while the Nasdaq was buoyed by gains in tech stocks. The Dow Jones Industrial Average fell 0.01 percent, to close at 21,478.17, the S&P 500 gained 0.15 percent, to 2,432.54 and the Nasdaq Composite  added 0.67 percent, to 6,150.86. The tech sector’s 1 percent rise led the S&P 500 gainers, with Advanced Micro Devices, Micron and Nvidia among the best performers in the sector. The PHLX semiconductor index rose 2.1 percent. O’Reilly Automotive fell 18.9 percent to a near three-year low after its second-quarter same-store sales widely missed its own estimates.

In Bond Markets U.S. Treasury yields edged lower on Wednesday as traders remained concerned about weak U.S. factory orders data, reversing a jump on Federal Reserve meeting minutes, while holding near recent peaks on views that global central bank policy was turning more hawkish. Yields were near the upper end of recent ranges, however, with benchmark 10-year yields last at 2.332 percent after touching a more than seven-week high of 2.357 percent in morning U.S. trading.

Economic Calendar

  • 13:15 GMT+1 US ADP Non-Farm Employment Change
  • 13:30 GMT+1 US Trade Balance
  • 15:00 GMT+1 US ISM Non-Manufacturing PMI
  • 16:00 GMT+1 US Crude Oil Inventories