European Open Market Briefing – 12/12/2017 – by Arjun Lakhanpal

December 12, 2017 by

In Asian Equity Markets Japanese stocks edged up on Tuesday morning in choppy trade supported by gains in financial stocks, mining shares and shippers, with investors on tenterhooks ahead of this week’s U.S. Federal Reserve policy meeting. The Nikkei share average rose 0.1 percent to 22,949.88 in midmorning trade, after opening flat. The broader Topix added 0.3 percent to 1,818.16. MSCI’s broadest index of Asia-Pacific stocks outside Japan drifted off 0.3 percent, having bounced 2 percent in the past three sessions. Moves were minor across the region, with blue-chip Chinese shares down 0.5 percent and Australian stocks up 0.2 percent.

In Currency Markets the dollar held firm near two-week highs versus a basket of major currencies on Tuesday, with traders awaiting the U.S. Federal Reserve’s policy meeting this week for fresh catalysts. Against the yen, the dollar eased 0.1 percent to 113.48 yen, after having risen to as high as 113.69 yen on Monday, the dollar’s strongest level in about a month. The euro last changed hands at $1.1771, having pulled back from Monday’s intraday high of $1.1811. The New Zealand dollar extended its gains on Tuesday and rose to $0.6937 at one point, its highest level since Nov. 28. It was last trading at $0.6927, up 0.3 percent on the day. The dollar index, which tracks the greenback against a basket of six major peers, inched up 0.1 percent to 93.931.

In Commodities Markets  Brent crude oil prices jumped above $65 per barrel for the first time since 2015 after the shutdown of the Forties North Sea pipeline knocked out significant supply from a market that was already tightening due to OPEC-led production cuts. Brent crude futures were at $65.29 a barrel, up 0.9 percent, from their last close. U.S. West Texas Intermediate crude futures were at $58.30 a barrel, up 0.5 percent, from their last settlement.  Spot gold rose 0.2 percent to $1,244.30 an ounce, after hitting its lowest since July 20 at $1240.10 on Monday. Silver was nearly unchanged at $15.72 an ounce. Platinum was down nearly 0.1 percent at $884.20 an ounce and palladium was 0.3 percent higher at $1,012.97 an ounce.

In US Equity Markets the main indexes closed higher on Monday and the biggest drivers were technology and energy sectors as oil prices rose and investors waited for an expected U.S. Federal Reserve rate hike later in the week. The Dow rose 0.23 percent, to 24,386.03, the S&P 500 gained 0.32 percent, to 2,659.99 and the Nasdaq Composite added 0.51 percent, to 6,875.08. Technology stocks were back in favor with the biggest boost from Apple Inc as investors eyed a continuation of strong fundamentals in the sector. Shares of Bluebird Bio closed up 17.9 percent, following news of positive responses in an early stage myeloma study of its experimental gene-modifying immunotherapy drug co-developed with Celgene. Celgene’s shares rose 1.8 percent.

In Bond Markets Japanese government bonds were steady on Tuesday, underpinned by solid demand at a sale of five-year JGBs as investors awaited the next session’s U.S. monetary policy decision for directional cues. The benchmark 10-year cash JGB yield unchanged on the day at 0.045 percent, and 10-year JGB futures were up 0.03 point at 150.93 in afternoon trade. On Tuesday, the 20-year yield was flat on the day at 0.565 percent, while the 30-year yield was also flat at 0.815 percent.

Economic Calendar

  • 10:30 GMT+0 UK CPI y/y
  • 14:30 GMT+0 US PPI m/m
  • 20:00 GMT+0 EU ECB President Draghi Speaks
  • 23:15 GMT+0 AUD RBA Gov Lowe Speaks