European Open Market Briefing – 14/11/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei index edged up on Tuesday morning in choppy trade, with semiconductor equipment makers attracting buyers, while Mizuho Financial Group fell on dismal earnings. The Nikkei, which opened lower and traversed in positive and negative territory, was up 0.3 percent at 22,447.88. The broader Topix was flat at 1,783.63. MSCI’s broadest index of Asia-Pacific stocks outside Japan lost 0.1 percent after two sessions of declines, while Australia fell 0.8 percent. In Greater China, the Shanghai Composite lost 0.37 percent and the Hang Seng Index fell 0.02 percent.

In Currency Markets the dollar got support from higher U.S. Treasury yields in early Asian trading on Tuesday, while sterling arrested a recent slide, which followed concerns about Theresa May’s ability to stay on as British prime minister.  The euro was steady at $1.1670, holding well above last week’s a 3-1/2-month low of $1.1553. Sterling edged up 0.1 percent to $1.3122 after coming under pressure from political turmoil ahead of this week’s debate by British lawmakers about the government’s plan to leave the European Union. Against its Japanese counterpart, the dollar inched 0.1 percent higher to 113.70 yen, but remained below its eight-month high of 114.735 hit last week. The dollar index was steady on the day at 94.499.

In Commodities Markets oil prices fell on Tuesday as the prospect of further rises in U.S. output undermined ongoing OPEC-led production cuts aimed at tightening the market. Brent crude futures were at $62.94 per barrel, down 0.35 percent, from their last close. U.S. West Texas Intermediate crude was at $56.62 per barrel, down 0.25 percent. The U.S. government said on Monday U.S. shale production for December would rise for a 12th consecutive month, increasing by 80,000 bpd.  Spot gold was nearly unchanged at $1,277.39 per ounce. U.S. gold futures for December delivery fell 0.1 percent to $1,277.60. Silver fell 0.5 percent to $16.96 per ounce and platinum declined 0.4 percent to $928.55. Palladium rose 0.3 percent to $992.72 an ounce.

In US Equity Markets  stock indexes rose on Monday as a sharp decrease in General Electric shares was more than offset by gains in high dividend-paying sectors including consumer staples and utilities. The Dow Jones Industrial Average rose 0.07 percent, to 23,439.7, the S&P 500 gained 0.10 percent, to 2,584.84 and the Nasdaq Composite added 0.1 percent, to 6,757.60. General Electric  slashed its dividend by 50 percent and cut its profit forecast while unveiling a plan that narrowed its focus on aviation, power and healthcare. Shares of the industrial conglomerate fell 7.2 percent. Tyson Foods shares climbed 2.0 percent after the meat processor said low prices for livestock feed will help boost results again next year.

In Bond Markets U.S. Treasury two-year note yields hit a fresh nine-year high on Monday, as the yield curve resumed its flattening and investors priced in a 25-basis-point interest rate hike by the Federal Reserve in December. In afternoon trading, the 10-year Treasury yield was at 2.402 percent, up slightly from 2.4 percent late on Friday. The two-year yield hit a nine-year peak of 1.687 percent, up from 1.662 percent last Friday. U.S. 30-year yields, meanwhile, fell to 2.867 percent, from Friday’s 2.88 percent.

Economic Calendar

• 10:30 GMT+0 UK CPI y/y
• 11:00 GMT+0 EU ECB President Draghi Speaks
• 11:00 GMT+0 UK BOE Gov Carney Speaks
• 11:00 GMT+0 JPY BOJ Gov Kuroda Speaks
• 11:00 GMT+0 US Fed Chair Yellen Speaks
• 14:30 GMT+0 US PPI m/m