European Open Market Briefing – 10/07/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei index rose on Monday morning after Wall Street gained on Friday, while the dollar strengthened against the yen on the heels of U.S. jobs data that gave investors more confidence in the strength of the U.S. economy. The Nikkei gained 0.6 percent to 20,047.33 in midmorning trade. The broader Topix gained 0.4 percent to 1,613.90. MSCI’s broadest index of Asia-Pacific stocks outside Japan advanced 0.4 percent. Australian stocks were up 0.3 percent and South Korea’s KOSPI added 0.2 percent. Hong Kong’s Hang Seng gained 1 percent, though China’s bluechip shares were flat.

In Currency Markets the dollar was on solid footing on Monday, after a bigger-than-expected increase in U.S. jobs suggested the Federal Reserve would stick with its tightening plans for the rest of this year. Against the yen, the dollar was 0.2 percent higher at 114.16 after notching a high of 114.21, its loftiest level since May 11. The euro edged down slightly on the day to $1.1404 but gained against its Japanese counterpart. The euro was 0.3 percent higher at 130.20 yen, after rising as high as 130.275 yen, its highest since February 2016. The dollar index, which gauges the greenback against a currency basket, was steady at 96.012.

In Commodities Markets oil prices recovered some losses on Monday after a 3 percent fall in the previous session, but markets remain under pressure from high drilling activity in the United States and ample supplies from producer club OPEC. Brent crude futures were at $47.08 per barrel, up 0.8 percent, from their last close. U.S. West Texas Intermediate crude futures were at $44.60 per barrel, up 0.8 percent. OPEC exported 25.92 million barrels per day (bpd) in June, 450,000 bpd more than in May and 1.9 million bpd more than a year earlier.  Gold inched down 0.2 percent to $1,210.92, close to the four-month low touched on Friday as the dollar rose and demand for risk assets rose.

In US Equity Markets  stocks closed on a high note Friday, with the S&P 500 index posting its best gain in six sessions on the heels of a U.S. payrolls report that gave investors more confidence in the strength of the U.S. economy. The Dow rose 0.44 percent, to end at 21,414.34, the S&P 500 gained 0.64 percent, to 2,425.18 and the Nasdaq Composite added 1.04 percent, to 6,153.08. The technology sector, up 1.25 percent, led the charge higher, buoyed by gains of more than 1 percent in market-cap heavyweights Apple, Microsoft and Facebook. Tesla rose 1.42 percent after the luxury electric carmaker said about 3,500 vehicles were in transit to customers at the end of the second quarter and they would be counted as deliveries in the third quarter.

In Bond Markets most U.S. Treasury yields rose on Friday, with longer-dated yields briefly hitting multi-week highs, after U.S. jobs data came in strong enough to keep expectations alive for tighter global central bank monetary policy. Benchmark 10-year Treasury yields hit a more than eight-week high of 2.398 percent and 30-year yields hit a more than six-week high of 2.943 percent. Yields were also rising in Europe, with 10-year Bund yields hitting an 18-month high on Friday of 0.58 percent.