European Open Market Briefing – 21/06/2017 – by A Lakhanpal

In Asian Equity Markets Japan’s Nikkei index edged down on Wednesday morning after a slightly stronger yen sapped risk appetite, while mining stocks underperformed on the back of weaker oil prices. The Nikkei fell 0.1 percent to 20,209.00 in midmorning trade, moving away from near two-year highs marked previous day. MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.7 percent, with Australia’s commodity-heavy market down 1.1 percent. The Hang Seng Index fell 0.93 percent, but mainland markets made modest gains with the Shanghai Composite up 0.18 percent and the Shenzhen Composite edged higher by 0.12 percent.

In Currency Markets the dollar pulled back from one-month highs against a basket of currencies on Wednesday as falling oil prices pushed down U.S. yields, while the pound wobbled after Bank of England Governor Mark Carney shot down hopes of an interest rate hike.  The euro was steady at $1.1137 after retreating to a three-week low of $1.1119 overnight. The dollar was down 0.2 percent at 111.220 yen , off a near one-month peak of 111.790 touched on Tuesday. The pound was little changed at $1.2630. The Australian dollar edged down 0.1 percent to $0.7574 and the New Zealand dollar was 0.2 percent lower at $0.7228.

In Commodities Markets oil prices decreased on Wednesday, trading around multi-month lows as investors discounted evidence of strong compliance by OPEC and non-OPEC oil producers with a deal to cut global output. Global benchmark Brent was down 0.2 percent, at $45.91 barrel after falling nearly 2 percent in the previous session to its lowest settlement since November. U.S. crude futures were trading down 0.2 percent, at $43.43, after a more than 2 percent decline to the lowest since September on Tuesday. Spot gold had risen 0.3 percent to $1,246.25 per ounce and silver rose 0.2 percent to $16.50 per ounce.

In US Equity Markets  stocks closed lower on Tuesday as a sharp decline in oil prices hurt energy stocks and retail stocks were pulled down by concerns about Amazon.com’s plan to boost its apparel business, while investors also worried about future Federal Reserve rate hikes. The Dow Jones Industrial Average was down 0.29 percent, to 21,467.14, the S&P 500 had lost 0.67 percent, to 2,437.03 and the Nasdaq Composite fell 0.82 percent, to 6,188.03. The S&P technology sector fell 0.8 percent, with the biggest drags from Microsoft and Apple. Nasdaq’s biotechnology index rose 1.3 percent after a 2.5 percent jump the previous day.

In Bond Markets longer-dated Japanese government bond prices gained on Wednesday, tracking overnight gains in U.S. Treasuries, causing the yield curve to flatten. The benchmark 10-year JGB yield was unchanged at 0.050 percent, while the 30-year yield fell a basis point to 0.790 percent. Superlong JGBs such as the 20- and 30-year tenors also drew support from firm domestic demand.

Economic Calendar

• 15:30 GMT+1 US Crude Oil Inventories
• 22:00 GMT+1 NZD Official Cash Rate
• 22:00 GMT+1 NZD RBNZ Rate Statement