European Open Market Briefing – 20/06/2017 – by Arjun Lakhanpal

June 20, 2017 by

In Asian Equity Markets Japan’s Nikkei index probed its highest levels in nearly two years on Tuesday, powered by record highs on Wall Street and a weaker yen. The Nikkei was up 1.1 percent at the end of morning trade at 20,287.67, after rising as high as 20,318.11, its highest level since August 2015. MSCI’s broadest index of Asia-Pacific stocks outside Japan held firm near a two-year high struck last week, but was little changed on the day, with gains in high-tech firms offset by a decline in Australian stocks. The blue-chip CSI300 index of mainland stocks was down 0.2 percent.

In Currency Markets the dollar hit a three-week high against the yen on Tuesday, after an influential Federal Reserve official said U.S. inflation should rise alongside wages, supporting expectations for the Fed to keep raising interest rates.  The greenback last stood at 111.685 yen, up 0.2 percent on the day. The euro held steady at $1.1145, having retreated from a 7-month peak of $1.1296 set on June 14. The British pound fell slightly to $1.2732 from Monday’s high of $1.2814, held back by uncertainty over domestic politics and over Britain’s economic future, as formal Brexit negotiations got under way on Monday.

In Commodities Markets oil markets held around seven-month lows on Tuesday as investors focused on persistent signs of rising supply that are undermining attempts by OPEC and other producers to support prices. Brent futures were up 4 cents at $46.95. U.S. West Texas Intermediate crude futures were down 1 cent at $44.19 a barrel. They declined 1.2 percent in the previous session, to settle at $44.20 per barrel.  Spot gold rose 0.2 percent to $1,244.76 per ounce. Among other metals, spot palladium rose 0.3 percent to $862.53 per ounce, and platinum fell 0.1 percent to $921.40 per ounce. Silver rose 0.7 percent to $16.56 per ounce.

In US Equity Markets  stocks rose on Monday, with the S&P 500 and the Dow hitting record highs with growth sectors such as technology in favor again as investors appeared to regain confidence in the economy after upbeat comments from Fed officials. The Dow rose 0.68 percent, at 21,528.99, the S&P 500 gained 0.83 percent, to 2,453.46 and the Nasdaq Composite rose 1.42 percent, to 6,239.01. Apple rose 2.9 percent, providing the biggest boost to the S&P followed by JPMorgan Chase  which rose 2.2 percent. Biogen ended up 3.5 percent, after it was upgraded to “neutral” from “sell” at UBS. Shares of Clovis Oncology rose 46.5 percent after late-stage data on its ovarian cancer drug.

In Bond Markets Japanese government bond prices fell on Tuesday as the market was pressured by rallying Tokyo shares and an overnight retreat in U.S. Treasuries, although firm demand at a liquidity-enhancing debt auction helped limit losses. The benchmark 10-year yield rose half a basis point to 0.055 percent. The 20-year yield was last unchanged at 0.560 percent after rising to 0.570 percent earlier in the session.

Economic Calendar

  • 08:30 GMT+1 UK BOE Gov Carney Speaks
  • 09:45 GMT+1 CHF SNB Chairman Jordan Speaks