European Open Market Briefing – 10/05/2017 – by Arjun Lakhanpal

May 10, 2017 by

In Asian Equity Markets Japanese stocks edged up to hover at 17-month highs as a weak yen trend supported sentiment, but gains were by limited by fears arising from U.S. President Donald Trump’s sacking of his FBI director and North Korea’s nuclear programme. The Nikkei index rose 0.5 percent to 19,938.53 in mid-morning trade, the highest since December 2015, after it fell 0.3 percent on the previous day. The broader Topix rose 0.3 percent to 1,586.02 and the JPX-Nikkei Index 400 gained 0.2 percent to 14,159.38. MSCI’s Asia ex Japan index rose 0.3 percent after posting modest gains in the previous session.

In Currency Markets the dollar slid on Wednesday and the perceived safe-haven yen gained after U.S. President Donald Trump abruptly fired FBI Director James Comey in a move that shocked Washington and piqued investors’ aversion to risk. The dollar fell 0.2 percent against its Japanese counterpart to 113.74 yen, below its overnight high of 114.325, which was its highest since March 15. The euro fell 0.1 percent against the yen to 123.60, moving away from Monday’s one-year high of 124.58. The euro added 0.2 percent to $1.0895, edging back toward a six-month high of $1.1024 hit on Monday, after centrist Emmanuel Macron’s victory in the French presidential election on Sunday.

In Commodities Markets oil futures rose in Asian trading on Wednesday after Reuters reported Saudi Arabia would cut supplies to the region as OPEC battles against rising U.S. output that is threatening to derail its attempts to end a sustained global glut in crude.  Global benchmark Brent futures were up 0.5 percent, at $48.98 a barrel. They fell 1.2 percent on Tuesday. U.S. West Texas Intermediate crude was up 0.6 percent, at $46.17 a barrel. Spot gold was up 0.1 percent at $1,222.21 per ounce. In other precious metals, silver was up 0.2 percent at $16.17 an ounce. Platinum gained 0.3 percent to $903.49 after falling 1.7 percent on Tuesday. Palladium was steady at $796 an ounce.

In US Equity Markets the S&P 500 fell on Tuesday after edging up to an intra-day record high for the second straight session, while Apple became the first U.S. company to close with a market capitalization above $800 billion. The Dow Jones Industrial Average declined 0.17 percent to end at 20,975.78 points and the S&P 500  lost 0.10 percent to 2,396.92 points. The Nasdaq Composite added 0.29 percent to close at a record high of 6,120.59. Shares of Valeant Pharmaceuticals jumped 24 percent after the company posted its first profit in six quarters. Wayfair rose 20.73 percent to an all-time high after the online furniture retailer revenue beat analysts’ expectations.

In Bond Markets Japanese government bonds edged down on Wednesday, taking their cue from rising Japanese equities but not straying far from their recent ranges. The benchmark 10-year cash JGB added half a basis point to 0.035 percent, while 10-year JGB futures were down 0.07 point at 150.71 in afternoon trading. The benchmark 10-year U.S. Treasury yield fell to 2.388 percent in Asian trade, down from Tuesday’s U.S. close of 2.407 percent, after U.S. President Donald Trump abruptly fired FBI Director James Comey in a move that shocked Washington and piqued investors’ aversion to risk.

Economic Calendar

  • 13:00 GMT+1 EU ECB President Draghi Speaks
  • 15:30 GMT+1 US Crude Oil Inventories
  • 22:00 GMT+1 NZD Official Cash Rate
  • 22:00 GMT+1 NZD RBNZ Rate Statement
  • 23:00 GMT+1 NZD RBNZ Press Conference