European Open Market Briefing – 15/08/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei share average inched up on Friday with the market apparently unruffled by North Korea’s ballistic missile launch, wih the dollar remaining relatively stable against the yen despite Pyongyang’s latest challenge. The Nikkei initially fell in a knee-jerk reaction soon after the open but pared the losses and last stood at 19,835.43, up 0.15 percent on the day. The broader Topix was 0.15 percent higher at 1,634.63 after setting a two-year high of 1,642.56 on Thursday. MSCI’s Asia-Pacific stocks index excluding Japan shed 0.4 percent, though it was still up 0.4 percent on the week.

In Currency Markets the dollar inched higher versus the yen on Friday, regaining its footing after taking a hit when North Korea fired a missile over Japan into the Pacific Ocean. The dollar last stood at 110.37 yen, up 0.1 percent on the day, a recovery from the intraday low of 109.55 yen set in early Asian trade on Friday when it came under pressure as the yen edged higher following reports of North Korea’s missile launch. The pound held steady at $1.3403. On Thursday it had topped $1.34 for the first time in a year, and recorded a daily gain of 1.4 percent. The euro fell 0.1 percent to $1.1913, staying below a 2-1/2 year high of $1.2092 set last week.

In Commodities Markets oil prices were lower on thin trading on Friday but on course for weekly gains, the third in a row in the case of Brent, as the clean-up after hurricanes in the United States gathered pace and the outlook for demand took on a firmer tone. U.S. West Texas Intermediate crude was down 0.4 percent, at $49.68 a barrel. It briefly broke above $50 on Thursday, hitting a four-month high, and finished 1.2 percent higher at $49.89, its highest close since July 31. Brent crude futures were down 0.5 percent, at $55.18 a barrel. Spot gold edged up 0.1 percent to $1,330.79 an ounce. Silver was up 0.3 percent to $17.80 an ounce. Platinum rose 0.2 percent to $980.05 an ounce, while palladium gained 0.2 percent to $924.50.

In US Equity Markets  rising shares of Boeing pulled the Dow Jones Industrial Average up to a record high on Thursday, while the S&P 500 fell as investors saw higher-than-expected inflation increasing the chances of an interest rate hike.  The Dow rose 0.2 percent to end at 22,203.48 points, while the S&P 500 lost 0.11 percent to 2,495.62. The Nasdaq Composite lost 0.48 percent to 6,429.08, hurt by a 0.86-percent decline in Apple. Six of the 11 major S&P 500 sectors rose, led by a 0.88 percent increase in utilities. Boeing rose 1.36 percent after Deutsche Bank raised its price target on the aerospace and defense stock. Equifax fell 2.35 percent after the Federal Trade Commission opened a probe into the company’s massive data breach.

In Bond Markets Japanese government bond prices gained on Friday following a regular debt-buying operation by the Bank of Japan. The benchmark 10-year yield declined 1 basis point to 0.025 percent, pulling away from a three-week high of 0.040 percent set on Thursday. The five-year yield fell 1.5 basis points to minus 0.120 percent. The 10-year U.S. Treasuries yield rose to as high as 2.225 percent, but fell back to 2.178 percent in Asia on Friday following North Korea’s missile launch.

Economic Calendar

• 13:30 GMT+1 US Core Retail Sales m/m
• 13:30 GMT+1 US Retail Sales m/m