European Open Market Briefing – 09/05/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japanese equities fell on Tuesday as the market ran out of puff after rallying to a 17-month high the previous day, though it was supported well by a confluence of factors like the significantly weaker yen. The Nikkei index edged down 0.1 percent to 19,875.89. The broader Topix shed 0.2 percent to 1,582.82 and the JPX-Nikkei Index 400 fell 0.25 percent to 14,132.85. MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.1 percent on Tuesday. China’s CSI 300 index retreated 0.8 percent, while Hong Kong’s Hang Seng fell 0.1 percent. Taiwan stocks bucked the trend, surpassing the 10,000 point mark to hit a two-year high. They were last up about 0.2 percent.

In Currency Markets the euro pulled back from recent six-month highs on Tuesday, but remained well-supported as fading worries over political populism and signs of improving economic conditions in Europe bolstered investor confidence. The euro fell to $1.0921 from $1.1024, its highest level in six months, hit in early Monday trade on relief after centrist Emmanuel Macron’s victory in France’s presidential election. Against the yen, it stood at 123.72 yen after Monday’s one-year high of 124.58. The dollar traded at 113.27 yen, near its highest level since mid-March. The Australian dollar fell to as low as $0.7364 after local retail sales posted a surprise decrease of 0.1 percent in March despite expectations of 0.3 percent rise.

In Commodities Markets oil prices gave up earlier gains on Tuesday, as concerns over slowing demand and a relentless rise in U.S. crude output undermined the impact of hopes that OPEC-led production cuts could be extended. Brent crude futures were at $49.37 per barrel on Tuesday, down from a high of $49.60 earlier in the day and near their last close. U.S. West Texas Intermediate crude oil futures were trading at $46.46 per barrel, down from an intra-day high of $46.66 and also little changed from their last settlement. Spot gold was up 0.2 percent at $1,228.20 per ounce. Spot silver gained 0.1 percent to $16.25 an ounce. Platinum fell 0.3 percent to $913.75 and palladium was steady at $807.

In US Equity Markets  the S&P 500 ended flat on Monday after briefly touching a record high, while Wall Street’s “fear gauge” fell to its lowest in over two decades following centrist Emmanuel Macron’s victory in the French presidential election.  The Dow edged up 0.03 percent to end at 21,012.28 points and the S&P 500 gained 0.08 points at 2,399.37. The Nasdaq Composite added 0.03 percent to 6,102.66. After the bell, car rental company Hertz Global Holdings reported a deeper-than-expected quarterly loss and its stock fell 15 percent. Kate Spade jumped 8.31 percent during Monday’s session after bigger rival Coach Inc said it would buy the handbag maker for $2.4 billion to increase its exposure to millennial shoppers. Coach shares rose 4.8 percent.

In Bond Markets U.S. Treasury yields rose on Monday with benchmark yields hitting a four-week high in advance of the sale of $62 billion in bond supply at this week’s quarterly refunding and following centrist Emmanuel Macron’s victory in the French presidential run-off. The benchmark 10-year note yield was up 2 basis points at 2.374 percent after touching 2.390 percent earlier Monday which was the highest since April 10. The yield on 30-year bonds was 2 basis points higher at 3.011 percent, while the two-year yield was up 1 basis point at 1.330 percent.

Economic Calendar

• 10:30 GMT+1 AUD Annual Budget Release