European Open Market Briefing – 07/09/2017 – by Arjun Lakhanpal

September 7, 2017 by

In Asian Equity Markets Japan’s Nikkei index rose on Thursday, pulling away from the previous session’s four-month intraday lows after news of an agreement to extend the U.S. debt limit cheered Wall Street. The Nikkei was up 0.4 percent at 19,430.19 at the end of morning trade. The broader Topix was 0.6 higher at 1,601.35 and the JPX-Nikkei Index 400 also added 0.6 percent to 14,193.17.MSCI’s broadest index of Asia-Pacific stocks outside Japan gained 0.5 percent. In Greater China, Hong Kong’s Hang Seng Index rose 0.11 percent and the Shanghai Composite eased 0.11 percent. Australian stocks rose 0.12 percent.

In Currency Markets the euro held firm on Thursday ahead of a European Central Bank policy decision, with the focus on what the ECB might say about the currency’s recent strength and how that may influence the policy outlook. The euro edged up 0.1 percent to $1.1925. The Canadian dollar last traded at C$1.2229  per U.S. dollar, taking a breather after rallying on an interest rate hike by the Bank of Canada. On Wednesday, it had scaled a high of C$1.2140, its highest level since June 2015, after the Bank of Canada surprised many by raising interest rates. The U.S. dollar eased 0.2 percent to 109.05 yen, but remained above a one-week low of 108.45 yen set on Wednesday.

In Commodities Markets  oil prices held steady on Thursday, supported by rising demand from the United States where Gulf Coast refineries are restarting in the wake of Hurricane Harvey.  U.S. West Texas Intermediate crude futures were at $49.08 barrel, 8 cents below their last settlement. Brent crude futures fell 9 cents to $54.11 a barrel, though still not far from May highs reached the previous day. Spot gold was little changed at $1,334.06 per ounce, after easing 0.3 percent in the previous session. Among other metals, silver was down 0.2 percent to $17.80 an ounce, while platinum fell 0.3 percent to $1,000.60 an ounce. Palladium lost 0.3 percent to $936.50 an ounce.

In US Equity Markets stocks rose on Wednesday, boosted by energy shares and helped by news of an agreement to extend the debt limit, as stocks bounced back from a day-earlier selloff. The Dow Jones Industrial Average rose 0.25 percent, to 21,807.64, the S&P 500 gained 0.31 percent, to 2,465.54 and the Nasdaq Composite added 0.28 percent, to 6,393.31. The energy sector rose 1.6 percent, for its biggest single-day gain in two months, as oil prices rose. Financials climbed 0.2 percent a day after their largest one-day decline since mid May. AT&T shares fell 1.4 percent and Verizon slid 1.0 percent, dragging on the S&P. Rival T-Mobile US said it will offer a free subscription to video streaming service Netflix with its unlimited data family plans.

In Bond Markets   Japanese government bond prices fell on Thursday as a retreat by U.S. Treasuries and a subdued 30-year debt auction weighed on the market. The benchmark 10-year JGB yield rose 1 basis point to 0.015 percent, its highest in 10 days.  The 20-year yield was up 2 basis points at 0.540 percent and the 30-year yield was up 2 basis points at 0.825 percent. Super-long JGBs underperformed slightly following Thursday’s 30-year auction. The 30-year yield had fell to a 2-1/2-month trough of 0.800 percent at the start of the week, and the low yields were seen to have discouraged some potential buyers at Thursday’s auction.

Economic Calendar

  • 12:45 GMT+1 EU Minimum Bid Rate
  • 13:30 GMT+1 EU ECB Press Conference
  • 13:30 GMT+1 US Unemployment Claims
  • 16:00 GMT+1 US Crude Oil Inventories