European Open Market Briefing – 15/12/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japanese stocks fell to more than a week low on Friday morning, with mobile firms extending a sell-off on concerns of increased competition after Rakuten said it aims to become Japan’s fourth wireless carrier. Taking the cue from weak U.S. stocks overnight, the Nikkei index declined 0.7 percent to 22,525.77 in midmorning trade after falling to 22,479.97, the lowest since Dec. 7. MSCI’s broadest index of Asia-Pacific stocks outside Japan was down 0.5 percent, but poised to gain 0.7 percent for the week. Chinese stocks fell, with the Shanghai Composite index off 0.9 percent and the blue-chip CSI300 index down 1 percent.

In Currency Markets the dollar was on the defensive on Friday after wrangling over a bill to change the U.S. tax code dented confidence, while the euro sagged after the European Central Bank signalled it would maintain stimulus for as long as needed. The dollar steadied against the yen at 112.38, nearly flat on the day but down 1 percent for the week, and moving away from a one-month high of 113.75 yen touched on Tuesday. The euro was little changed at $1.1787 after losing about 0.4 percent overnight. The pound inched up 0.1 percent to $1.3442. The Australian dollar was a shade higher at $0.7672 and the New Zealand dollar was up 0.2 percent at $0.6997.

In Commodities Markets  oil markets were stable on Friday as the Forties pipeline outage in the North Sea and ongoing OPEC-led production cuts supported prices, while rising output from the United States kept crude from rising further.  U.S. West Texas Intermediate crude futures were at $57.18 a barrel, up 14 cents from their last settlement. Brent crude futures were at $63.34 a barrel, up 3 cents from their previous close. Gold price rose slightly in Asia on Friday as investors digested a triple load of central bank view from the Fed, ECB and Bank of England that pointed to continued easy liquidity. Gold futures for February delivery  edged up 0.02 percent to $1,257.40 a troy ounce.

In US Equity Markets  major stock indexes fell on Thursday, with the S&P 500 down the most in a month, as investor worries over potential roadblocks to the Republicans’ tax overhaul more than offset optimism over strong retail sales data. The Dow Jones Industrial Average fell 0.31 percent, to close at 24,508.66, the S&P 500 lost 0.41 percent, to 2,652.01 and the Nasdaq Composite fell 0.28 percent, to 6,856.53.  Healthcare stocks were the biggest weight on the S&P 500, falling 1.1 percent. Walt Disney struck a deal to buy Twenty-First Century Fox’s assets for $52.4 billion in stock. Fox shares rose 6.5 percent and Disney rose 2.8 percent, also boosting the consumer discretionary sector, the only major S&P sector in the black on Thursday.

In Bond Markets Japanese government bond prices were supported on Friday, with futures edging up as Tokyo stocks fell and enhanced demand for safe-haven debt. March 10-year JGB futures were 0.04 point higher at 150.92. The benchmark 10-year yield stood unchanged at 0.045 percent, while the 30-year yield was also steady at 0.805 percent. The BOJ’s bond buying helped offset some of the negative impact from Treasuries, which came under pressure overnight from robust U.S. retail sales data.