European Open Market Briefing – 16/11/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei index rose on Thursday as buyers stepped back in for bargains following six straight days of losses, with SoftBank gaining after a report that it plans to invest as much as $25 billion in Saudi Arabia. The Nikkei was up 0.6 percent at 22,176.87. The broader Topix added 0.3 percent to 1,748.88. MSCI’s broadest index of Asia-Pacific stocks outside Japan added 0.6 percent. Australian stocks added 0.3 percent, with sentiment helped by data showing the country’s jobless rate fell to 5.4 percent in October, its lowest since early 2013. In Greater China, the Shanghai Composite lost 0.10 percent and the Hang Seng Index gained 0.53 percent.

In Currency Markets  the dollar was on the defensive on Thursday as doubts for the prospects of U.S. tax reforms, a fall in U.S. stocks, and declining high-yield bond prices all soured the mood, offsetting an uptick in underlying U.S. inflation. The dollar index inched up 0.1 percent at 93.893 as the euro edged down 0.1 percent to $1.1779, retreating from a one-month top of $1.1860 on Wednesday.  The dollar fell to 112.47 yen on Wednesday and fetched 113.04 yen in late Asian trade. The Aussie traded at $0.7594, almost flat on the day, after having plumbed a low of $0.7567, a trough last seen in late June. The New Zealand dollar edged down to $0.6857, near its 5 1/2-month low of $0.6818 touched last month.

In Commodities Markets oil markets were stable on Thursday as rising U.S. crude production and inventories were countered by expectations that OPEC will extend an ongoing production cut during a meeting at the end of this month. Brent crude futures were at $61.98 per barrel, 11 cents above their last close. U.S. West Texas Intermediate crude futures were at $55.37 a barrel, 4 cents up from their last settlement. U.S. crude inventories rose for a second week in a row, building by 1.9 million barrels in the week to Nov. 10 to 459 million barrels, the government’s Energy Information Administration said on Wednesday. Spot gold was nearly unchanged at $1,278.55 per ounce and silver was unchanged at $16.99 per ounce.

In US Equity Markets stocks fell on Wednesday as energy sector shares fell for a fourth straight session, tracking crude prices, while a late run-up was thwarted by concerns over the passage of a tax revamp after Republican senators were critical of the proposal. The Dow Jones Industrial Average fell 0.59 percent, to close at 23,271.28 and the S&P 500 was down 0.55 percent at 2,564.62. The Nasdaq Composite lost 0.47 percent, to 6,706.21. Target shares fell 9.9 percent to $54.16 after the retailer issued a disappointing profit forecast for the key holiday quarter. After the closing bell, Cisco shares rose 5.2 percent after the company reported a 3.1 percent rise in quarterly profit driven by growth in its newer business areas.

In Bond Markets the gap between U.S. short-dated and long-dated U.S. Treasury yields contracted to its tightest in a decade after data showed a pickup in U.S. underlying inflation and an unexpected rise in retail sales, as the market priced in further interest rate hikes next year.  In afternoon trading, the 10-year Treasury yield fell to 2.336 percent, from 2.381 percent late on Tuesday. The U.S. two-year yield was at 1.687 percent, from 1.691 percent on Tuesday. U.S. 30-year bond yields slid to 2.784 percent, down from Tuesday’s 2.839 percent.

Economic Calendar

• 14:30 GMT+0 US Unemployment Claims