European Open Market Briefing – 19/07/2017 – by Arjun Lakhanpal

July 19, 2017 by

In Asian Equity Markets Japanese stocks struggled for traction on Wednesday, with buying in defensive stocks barely offsetting worries about the impact of a stronger yen as the U.S. dollar flounders. The Nikkei index was up 0.1 percent to 20,012.12 by midmorning after falling into negative territory. The broader Topix was up 0.1 percent to 1,621.80 and the JPX-Nikkei Index 400 was flat at 14,412.38. MSCI’s broadest index of Asia-Pacific stocks outside Japan was up 0.4 percent at its highest since April 2015. Shanghai’s blue-chip CSI300 index rose 1 percent and back toward an 18-month peak, while Australia’s main index added 0.6 percent.

In Currency Markets the dollar nursed losses on Wednesday after skidding to a 10-month low against a currency basket as the Republican failure to pushed through a stalled U.S. healthcare bill raised fears about the rest of President Donald’s Trump reform agenda. The euro was steady on the day at $1.1549 after rising as high as $1.1583 on Tuesday, its highest since May 2016. The dollar fell 0.1 percent on the day to 111.950 yen. The Australian dollar was up 0.1 percent at $0.7918 after rose 1.5 percent to two-year highs on Tuesday as minutes of the last meeting of the country’s central bank showed policymakers turned more upbeat on the economic outlook. The dollar index edged up 0.1 percent to 94.694.

In Commodities Markets oil prices fell on Wednesday after a rise in U.S. crude inventories and ongoing high output from OPEC producers revived concerns of a fuel supply overhang. Brent crude futures were at $48.81 per barrel, down 3 cents from their last close. U.S. West Texas Intermediate crude futures were at $46.33 per barrel, down 7 cents. U.S. crude stocks rose last week, adding 1.6 million barrels in the week to July 14 to 497.2 million barrels, industry group the American Petroleum Institute said on Tuesday. U.S. gold futures for August delivery fell 0.1 percent to $1,240.90 per ounce. Silver rose 0.1 percent to $16.26 per ounce. Platinum fell 0.2 percent, to $920.50 per ounce and palladium fell 0.3 percent to $861.25 per ounce.

In US Equity Markets major stock indexes were mixed on Tuesday, as Netflix’s rally kept the Nasdaq Composite in the black while Goldman Sachs weighed on the Dow, with earnings taking investors’ focus. The Dow fell 0.25 percent, to 21,574.73, the S&P 500 gained 0.06 percent, to 2,460.61 and the Nasdaq Composite added 0.47 percent, to 6,344.31. Technology was the largest percentage gainer among the 11 S&P 500 sectors. Healthcare ended up less than 0.1 percent. Netflix rose 13.5 percent a day after it exceeded Wall Street forecasts by reporting 5.2 million new streaming customers in the second quarter. Johnson & Johnson gained 1.7 percent after saying expected sales growth to pick up in the second half of the year.

In Bond Markets U.S. Treasury yields fell on Tuesday, as investors grew cautious about the latest political drama in Washington around healthcare legislation, with weak economic data adding to the uncertainty about the pace of future interest rate hikes by the Federal Reserve. In late trading, U.S. 10-year yields fell to 2.266 percent from 2.309 percent late Monday.  U.S. 30-year bonds yielded 2.854 percent, from 2.893 percent on Monday. U.S. two-year yields were down at 1.351 percent from Monday’s 1.36 percent.

Economic Calendar

  • 13:30 GMT+1 US Building Permits
  • 15:30 GMT+1 US Crude Oil Inventories