European Open Market Briefing – 12/06/2017 – by Arjun Lakhanpal
June 12, 2017In Asian Equity Markets Japan’s Nikkei share average ended lower on Monday, dragged down by declines in technology shares after their U.S. counterparts were sold off sharply in the previous session. The Nikkei ended down 0.5 percent at 19,908.58. The broader Topix was flat at 1,591.55. MSCI’s broadest index of Asia-Pacific stocks outside Japan was down 0.8 percent, with the tech index sliding 1.5 percent. South Korea’s KOSPI slid 1.2 percent. Hong Kong’s Hang Seng lost 1.3 percent while Shanghai fell 0.5 percent.
In Currency Markets sterling steadied on Monday as British Prime Minister Theresa May scrambled to pick up the pieces and reunite her Conservative Party after a disastrous election that could disrupt Brexit negotiations. Sterling last traded at $1.2756, edging up 0.1 percent on the day, after sliding 1.7 percent on Friday, its biggest one-day decline in around eight months. The pound fell by as much as 2.5 percent in the previous session to its lowest since mid-April after no single party won a clear claim to power in the UK election on Thursday. The euro edged up 0.1 percent to $1.1208, staying below a seven-month high of $1.1285 set in early June. The dollar held steady at 110.29 yen, having retreated from Friday’s one-week high of 110.815 yen.
In Commodities Markets oil prices rose on Monday as futures traders bet the market may have bottomed after recent falls, even as physical markets remain bloated, especially from a relentless rise in U.S. drilling. Brent crude futures were at $48.29 per barrel, up 0.3 percent, from their last close. U.S. West Texas Intermediate crude futures were at $45.95 per barrel, up 0.3 percent. Spot gold was up 0.1 percent at $1,267.49 an ounce, after shedding 1 percent in its biggest one-day percentage decline since May 18 in the previous session. Among other metals, spot palladium fell 0.7 percent to $884.49 per ounce after hitting a 16-year high on Friday. Silver was flat at $17.16 per ounce, while platinum rose 0.3 percent to $936.45 per ounce.
In US Equity Markets technology stocks sold off sharply on Friday, taking a toll on the Nasdaq and dragging on other major Wall Street indexes, which touched record highs earlier in the day. The Dow Jones Industrial Average rose 0.42 percent, to 21,271.97, while the S&P 500 lost 0.08 percent, to 2,431.77. The Nasdaq Composite fell 1.8 percent, to end at 6,207.92. The technology sector finished down 2.7 percent, after paring declines. Apple Inc shares fell 3.9 percent after a report that iPhones to be launched later this year will use modem chips with slower download speeds than some rival smartphones. Microsoft Corp fell 2.3 percent, chipmaker Nvidia closed down 6.5 percent after Citron Research said the stock could trade back to $130.
In Bond Markets long-dated Japanese government bond prices fell on Monday on caution ahead of a 20-year government debt auction the following day, while short- to medium-term notes stabilised after their sell-off last week. The benchmark 10-year JGB yield ticked up 1.0 basis point to 0.060 percent, while the September 10-year JGB futures, which look set to take over the benchmark status on Monday, fell 0.09 point in price. The 20-year yield stood flat at 0.560 percent , while the 30-year yield rose 0.5 basis point to 0.825 percent.
