European Open Market Briefing – 13/09/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japanese stocks rose for a third day to hit a fresh one-month high on Wednesday after Wall Street strengthened and the dollar scaled a two-week top on the yen, helping buoy cyclicals such as exporters and banks. The Nikkei gained 0.5 percent to 19,867.72 in midmorning trade, after earlier reaching 19,879.85, the highest level since Aug. 9. The broader Topix rose 0.6 percent to 1,637.08 and the JPX-Nikkei Index 400 advanced 0.6 percent to 14,505.02. MSCI’s broadest index of Asia-Pacific stocks outside Japan was slightly lower, after earlier poking up to its highest level since October 2007. Australian shares added 0.2 percent, while Korean stocks were 0.1 percent higher.

In Currency Markets the dollar was buoyant against the yen on Wednesday, although it was capped against the euro with a potentially supportive spike in U.S. yields neutralised by a similar move by their German counterparts. The dollar was a shade lower at 110.085 yen after rising earlier in the session to 110.295, its highest since Sept. 1. The euro rose to a 2-1/2-year high of $1.2092 last week after a policy meeting by the European Central Bank gave bulls cause for short-term optimism towards potential policy tapering. Sterling added to overnight gains to touch $1.3315, its highest in a year. The Australian and New Zealand dollars were flat at $0.8021 and $0.7288, respectively. The dollar index inched down 0.1 percent to 91.807.

In Commodities Markets oil prices were mixed on Wednesday, dampened by reports of rising U.S. crude stockpiles but retaining some of the gains made in the previous session after OPEC said it expected higher demand for its crude next year. U.S. West Texas Intermediate was unchanged at $48.23 a barrel. International benchmark Brent crude was down 0.2 percent, at $54.14 a barrel, having settled up 0.8 percent in the previous session. Spot gold was unchanged at $1,331.11 an ounce. Among other precious metals, silver was down 0.4 percent at $17.84 an ounce. Platinum edged 0.2 percent lower at $984.50, while palladium was down 0.5 percent at $949.25 an ounce.

In US Equity Markets  the major indexes hit record closing highs on Tuesday, with financial stocks leading the charge, but gains were stunted by a decline in Apple Inc shares after it unveiled its latest line of iPhones. The Dow rose 0.28 percent, to 22,118.86, the S&P 500 gained 0.34 percent, to 2,496.48 and the Nasdaq Composite added 0.34 percent, to 6,454.28. Apple’s shares closed a volatile trading session 0.4 percent lower at $160.86 after rising as high as $163.96 following the unveiling of its 10th anniversary edition of the iPhone. Financials rose 1.2 percent, helped by a 1.8 percent jump in the bank subsector. Also, Goldman Sachs rose 2.2 percent after it unveiled a growth plan that could add as much as $5 billion in revenue annually.

In Bond Markets  Japanese government bond prices retreated on Wednesday as the allure of safe-haven debt dimmed with Tokyo’s Nikkei stock average advancing to a one-month high.  The benchmark 10-year JGB yield rose 1 basis point to 0.025 percent, pulling further away from a 10-month low of minus 0.015 percent on Friday, when concerns over North Korea and Hurricane Irma took a toll on risk assets. The 30-year yield also added 1 basis point to 0.830 percent.

Economic Calendar

• 09:30 GMT+1 UK Average Earnings Index 3m/y
• 13:30 GMT+1 US PPI m/m
• 13:30 GMT+1 US Crude Oil Inventories