European Open Market Briefing – 17/10/2017 – by Arjun Lakhanpal

October 17, 2017 by

In Asian Equity Markets Japan’s Nikkei index was flat in choppy trade on Tuesday morning as falls in index-heavyweight SoftBank weighed on the market, while expectations that the ruling bloc will win the election later this month continued to underpin sentiment. The Nikkei opened 0.5 percent higher and was in positive territory most of the morning, but it was flat at 21,250.89 by late morning. MSCI’s broadest index of Asia-Pacific stocks outside Japan was up 0.1 percent having gained 10 of the past 12 sessions. In Greater China, the Shanghai Composite edged up 0.06 percent, while the Hang Seng Index climed 0.18 percent a day ahead of the opening of the 19th Communist Party Conference.

In Currency Markets the dollar edged up against its peers on Tuesday, supported by a rise in Treasury yields following a report that U.S. President Donald Trump was favoring a policy hawk as the next head of the Federal Reserve. The greenback was 0.1 percent lower at 112.070 yen  after rising 0.3 percent overnight, when it pulled away from a three-week low of 111.650. The euro fell 0.15 percent to $1.1780 after losing 0.25 percent the previous day. Sterling lost 0.1 percent to $1.3241, awaiting Bank of England Governor Mark Carney’s comments due later in the session for potential cues. The Australian dollar was 0.15 percent lower at $0.7840 as its rally last week to a two-week high of $0.7898 on upbeat Chinese data lost momentum.

In Commodities Markets  crude prices rose 1 percent on Monday as Iraqi forces entered the oil-rich city of Kirkuk, seizing territory from Kurdish fighters and briefly cutting some crude output from OPEC’s second-largest producer. Brent crude futures settled up 1.1 percent, to $57.82 per barrel while U.S. crude ended 0.8 percent higher at $51.87 per barrel. U.S. gold futures for December delivery were down 0.6 percent at $1,295.2 per ounce. Silver and platinum were both down 0.1 percent at $17.17 and $927.50 an ounce respectively. Palladium was 0.4-percent higher at $976.50 an ounce after hitting its best since February 2001 in the previous session.

In US Equity Markets  all three major stock indexes rose to record closing highs on Monday, with the Dow less than 50 points below 23,000, ahead of a long list of earnings this week and as financial shares recovered from last week’s losses. The Dow rose 0.37 percent, to 22,956.96, the S&P 500 gained 0.18 percent, to 2,557.64 and the Nasdaq Composite added 0.28 percent, to 6,624.01. JPMorgan Chase and Bank of America led gains in bank stocks, tracking a climb in U.S. Treasury yields, which benefits banks. JPMorgan was up 2.1 percent, while Bank of America rose 1.6 percent. Netflix gained 1.6 percent during the session and rose another 2 percent after the bell following the release of its results.  Apple shares gained 1.8 percent following a bullish brokerage call on the iPhone maker.

In Bond Markets longer-dated Japanese government bonds firmed on Tuesday after a 20-year debt auction drew ample investor demand and allowed the market to deflect negative pressure from weaker U.S. Treasuries and higher stocks. The 20-year and 30-year JGB yields were unchanged at 0.590 percent and 0.875 percent, respectively. The benchmark 10-year yield edged up 1 basis point to 0.070 percent.

Economic Calendar

  • 09:30 GMT+1 UK CPI y/y
  • 11:15 GMT+1 UK BOE Gov Carney Speaks