European Open Market Briefing – 06/12/2017 – by Arjun Lakhanpal

December 6, 2017 by

In Asian Equity Markets stocks fell across the board on Wednesday as various factors including weaker metals prices and monetary policy concerns in China soured investor risk sentiment. MSCI’s broadest index of Asia-Pacific stocks outside Japan fell to a two-month low and was last down 1.5 percent. The fall in the index deepened as Asia’s equity markets suffered losses, with Shanghai stocks falling to three-month lows and Hong Kong’s Hang Seng falling to a one-month trough amid fears over central banks tightening liquidity. Japan’s Nikkei was last down 2 percent with non-ferrous metals producers suffering large losses after copper’s slide overnight to a two-month low.

In Currency Markets the dollar edged down on Wednesday, as concerns about a possible U.S. government shutdown offset optimism about progress on tax reform legislation, while the Australian dollar weakened after economic data showed worrying signs for growth. The euro was steady on the day at $1.1828, while the dollar edged down 0.1 percent against its Japanese counterpart to 112.38 yen. The pound was down 0.2 percent at $1.3426, though it remained above its overnight low of $1.3370. The Australian dollar fell 0.3 percent to $0.7585, within sight of its five-month low of $0.7532 plumbed on Nov. 21. The dollar index, which tracks the greenback against a basket of six major currencies, inched 0.1 percent lower to 93.297.

In Commodities Markets oil prices fell on Wednesday, as refined product inventories in the United States rose in what the market interpreted as a sign of lackluster demand.  U.S. West Texas Intermediate crude futures were at $57.37 a barrel, down 0.4 percent, from their last settlement. Brent crude futures were down 0.4 percent, at $62.62 a barrel. Spot gold was steady at $1,266.28 an ounce. The session before, it hit its lowest since Oct. 6 at $1260.71. Among other precious metals, silver was nearly unchanged at $16.10 an ounce, after hitting its lowest since mid-July in the previous session. Platinum eased 0.1 percent to $915.10 an ounce, while palladium gained 0.6 percent to $988.20 an ounce.

In US Equity Markets stocks  fell on Tuesday as a technology rebound lost steam and Walt Disney Co shares decreased, while investors assessed how a Republican U.S. tax overhaul would impact corporate earnings. The Dow Jones Industrial Average lost 0.45 percent to end at 24,180.64 points, while the S&P 500  ended down 0.37 percent at 2,629.57. The Nasdaq Composite fell 0.19 percent to 6,762.21. Shares of Twenty-First Century Fox lost 0.30 percent after a report that Walt Disney was in the lead to acquire much of Fox’s media empire, though rival suitor Comcast Corp  remained in contention. Disney shares fell 2.72 percent and Comcast lost 1.98 percent. McDonald’s rose 1.37 percent after Jefferies upgraded the stock to a “buy” rating.

In Bond Markets Japanese government bonds were steady on Wednesday, underpinned by falling equities, as investors looked to the next session’s 30-year JGB auction. The benchmark 10-year cash JGB yield was flat on the day at 0.055 percent, and 10-year JGB futures finished up 0.04 point at 150.91. The 20-year yield was flat at 0.580 percent, while the 30-year yield rose half a basis point to 0.835 percent.

Economic Calendar

  • 14:15 GMT+0 US ADP Non-Farm Employment Change
  • 16:00 GMT+0 CAD BOC Rate Statement
  • 16:00 GMT+0 CAD Overnight Rate
  • 16:30 GMT+0 US Crude Oil Inventories