European Open Market Briefing – 07/08/2017 – by Arjun Lakhanpal

August 7, 2017 by

In Asian Equity Markets Japan’s Nikkei share average rose on Monday morning, led by sharp gains for Toyota Motor Corp after it upgraded its earnings outlook, while a weaker yen following strong U.S. jobs data underpinned overall sentiment. The Nikkei rose 0.6 percent to 20,080.50 in midmorning trade. The broader Topix gained 0.6 percent to 1,641.21, after reaching 1,642.34, the highest level since August 2015. MSCI’s broadest index of Asia-Pacific stocks outside Japan added 0.6 percent. But Chinese blue chips managed only slight gains, with investors hesitant to stake out fresh positions ahead of a raft of July data due this week and next.

In Currency Markets the dollar held the bulk of its gains on Monday after an upbeat U.S. jobs report lifted it off 15-month lows, with data lined up this week seen as key to whether the greenback’s rebound could be sustained in the longer term. The dollar was steady at 110.695 yen after going as high as 111.050 on Friday. The euro inched up 0.2 percent to $1.1798 after losing 0.8 percent on Friday. The Australian dollar was up 0.2 percent at $0.7944  having trimmed some of its losses after falling about 0.7 percent last week against the broadly higher dollar. The pound was little changed at $1.3055. The dollar index against a basket of six major currencies was a shade lower at 93.330 after climbing 0.75 percent on Friday.

In Commodities Markets oil prices edged down on Monday but still held near nine-week highs, supported by robust U.S. jobs data last week and a slight fall in the U.S. drill rig count, even as rising output from OPEC reined in crude markets. Global benchmark Brent crude futures were down 0.32 percent, at $52.25 a barrel. U.S. crude futures were down 15 cents, or 0.30 percent, at $49.43 per barrel. Spot gold rose 0.1 percent to $1,258.69 per ounce. Silver was flat at $16.23 per ounce, having retouched Friday’s over two-week low of $16.17 an ounce earlier in the session. Platinum climbed 0.1 percent to $960.20 per ounce and palladium fell 0.1 percent to $876.60 per ounce.

In US Equity Markets  the Dow Jones Industrial Average ended at its eighth straight record high on Friday, with gains in JPMorgan Chase and other banks after data showed U.S. employers hired more workers than expected in July. The Dow rose 0.3 percent to end at 22,092.81. The S&P 500 gained 0.19 percent to 2,476.83 and the Nasdaq Composite added 0.18 percent to 6,351.56. The S&P 500 materials index rose 0.48 percent, helped by a 1.07-percent rise in Dow Chemical. The utilities, healthcare and consumer staples indexes fell. Gilead’s 1.63-percent fall and Allergan’s  3.08-percent loss weighed on the healthcare index. Walt Disney fell 1.31 percent and was the biggest drag on the Dow.

In Bond Markets   Japanese government bonds edged down on Monday, taking their lead from weaker U.S. Treasuries after last week’s strong employment data as investors awaited the next session’s 30-year JGB sale.  The 10-year cash JGB yield rose half a basis point to 0.065 percent, while the September 10-year JGB futures contract finished 0.02 point lower at 150.24. In the superlong zone, the 20-year JGB yield inched up half a basis point to 0.575 percent, while the 30-year JGB yield added 1 basis point to 0.875 percent. Benchmark 10-year U.S. Treasury notes were flat at 2.2691 percent, and up from Thursday’s close of 2.228 percent.