European Open Market Briefing – 08/11/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei index fell on Wednesday morning from the previous session’s near 26-year high as investors took their profits, dragging on financial and mining stocks. The Nikkei lost 0.3 percent to 22,872.59 in mid-morning trade after touching as high as 22,953.18 on Tuesday, its highest level since January 1992. The broader Topix declined 0.2 percent to 1,810.08. The MSCI’s broadest index of Asia-Pacific stocks outside Japan erased early losses to rise 0.2 percent, its highest since November 2007. China’s blue-chip CSI300 index  gained 0.6 percent to reach ground last trod in mid-2015, just one of many milestones across region.

In Currency Markets the dollar fell broadly on Wednesday, hurt by a media report that suggested the implementation of a centerpiece corporate tax cut under discussion in U.S. tax reforms plans could be delayed. The dollar was down 0.2 percent at 113.800 yen,  falling away from an eight-month high of 114.735 touched on Monday. The euro rose 0.1 percent to $1.1597, bouncing modestly from a three-month low of $1.1553 plumbed overnight. The Australian dollar gained 0.1 percent to $0.7654 and the New Zealand dollar added 0.1 percent to $0.6909 after losing 0.6 percent the previous day. The Canadian dollar stood little changed at C$1.2767 per dollar after sliding 0.6 percent overnight.

In Commodities Markets  oil markets fell on Wednesday as Chinese crude imports fell to their lowest level in a year, although traders said that overall markets remained well supported largely due to OPEC-lead supply cuts. Brent futures were at $63.55 per barrel, down 0.2 percent, but still not far off a near two-and-a-half year high of $64.65 a barrel reached earlier this week. U.S. West Texas Intermediate crude was at $56.99 per barrel, down 0.4 percent, from their last settlement. Spot gold was up 0.2 percent at $1,277.94 per ounce. It fell about 0.5 percent on Tuesday. In other precious metals, silver rose 0.3 percent to $17.01 an ounce. Platinum was up 0.1 percent at $923.40 an ounce, while palladium gained 0.3 percent to $995.50 per ounce.

In US Equity Markets  the Dow eked out a fourth consecutive record high close on Tuesday, while the S&P 500 ended marginally lower after a disappointing profit forecast from Priceline and a decrease in financials.  The Dow ended up 0.04 percent at 23,557.23 and the S&P 500 fell 0.02 percent to 2,590.64. The Nasdaq Composite lost 0.27 percent to 6,767.78. Priceline lost 13.52 percent while travel-review website operator TripAdvisor fell 23.22 percent to a five-year low after both companies gave soft quarterly profit forecasts.  In extended trade, Snap Inc lost 16 percent after the Snapchat owner reported lower-than-expected daily active users for the third quarter. Valeant Pharmaceuticals rose 17.11 percent after the company’s profit beat Wall Street estimates.

In Bond Markets Japanese government bond prices tracked gains by U.S. Treasuries and rose on Wednesday, with a pause in long rallying Tokyo stocks also helping the debt market. The two-year yield fell 1 basis point to minus 0.205 percent and the 40-year yield also declined by a basis point to 0.995 percent, its lowest since late June. The benchmark 10-year yield stood unchanged at 0.025 percent.

Economic Calendar

• 16:30 GMT+0 US Crude Oil Inventories
• 21:00 GMT+0 NZD RBNZ Rate Statement
• 22:00 GMT+0 NZD RBNZ Press Conference