European Open Market Briefing – 20/11/2017 – by Arjun Lakhanpal

November 20, 2017 by

In Asian Equity Markets Japan’s Nikkei index fell on Monday amid losses on Wall Street and a stronger yen, although bargain hunting limited the losses. The Nikkei was down 0.4 percent at 22,303.98 points by late morning, following a brief pop into positive territory in early trade. The broader Topix was down 0.3 percent at 1,759.44. MSCI’s broadest index of Asia-Pacific stocks outside Japan was off its session lows but still down 0.1 percent. The Shanghai Composite index was down 0.5 percent, while China’s blue-chip CSI300 Index fell 0.2 percent.

In Currency Markets the euro hit a two-month low against the yen on Monday, as German Chancellor Angela Merkel’s efforts to form a three-way coalition government failed, stoking political uncertainty in the euro zone’s largest economy. Against the yen, the euro was last down 0.6 percent on the day at 131.43 yen.  The euro fell 0.5 percent against the dollar to $1.1735, pulling away from a one-month high of $1.1862 set on Wednesday last week. The euro’s retreat helped support the dollar against a basket of six major currencies, with the dollar index edging up 0.3 percent to 93.968. Against the yen, the dollar held steady at 112.01, having set a one-month low of 111.89 yen earlier on Monday.

In Commodities Markets oil markets were tepid on Monday as traders were reluctant to take on big new positions ahead of an OPEC meeting at the end of the month, when the producer club is expected to decide whether to continue output cuts aimed at propping up prices.  Brent crude futures were at $62.56 per barrel, down 0.3 percent, from their last close. U.S. West Texas Intermediate crude futures were at $56.59 a barrel, up 0.1 percent, from their last settlement. Spot gold had edged down 0.2 percent to $1,291.71 per ounce. Silver fell 0.8 percent to $17.17, while platinum drifted away from Friday’s near-two month peak of $954.30 and was down 1.1 percent at $939.99. Palladium rose 0.2 percent to $994.85 an ounce.

In US Equity Markets stocks  ended the week on a sour note on Friday, with major indexes falling modestly as investors weighed the fate of the Republicans’ tax overhaul plan. The Dow Jones Industrial Average fell 0.43 percent, to 23,358.24, the S&P 500 lost 0.26 percent, to 2,578.85 and the Nasdaq Composite fell 0.15 percent, to 6,782.79. Abercrombie & Fitch jumped 23.9 percent and Gap rose 7.0 percent after the apparel retailers reported results that beat estimates. Twenty-First Century Fox shares rose 6.2 percent after two people familiar with the situation said both Comcast and Verizon were interested in buying parts of its studio and TV operations.

In Bond Markets Japanese government bonds were little changed on Monday, drawing limited support from gains in U.S. Treasuries after German coalition talks failed, stoking political uncertainty in the euro zone’s largest economy. The 10-year JGB yield was up 0.5 basis point at 0.035 percent, while the 20-year yield stood flat at 0.570 percent and the 30-year yield was unchanged at 0.820 percent. The 10-year Treasury yield stood at 2.327 percent in Asian trade, down from its U.S. close of 2.354 percent on Friday.