European Open Market Briefing – 22/06/2017 – by Arjun Lakhanpal

June 22, 2017 by

In Asian Equity Markets Japan’s Nikkei index erased early modest gains on Thursday and edged down, as a stronger yen took its toll on market sentiment. The Nikkei was down 0.1 percent at 20,118.25 at the end of morning trade. The broader Topix was slightly lower on the day at 1,611.14 while the JPX-Nikkei Index 400 was down 0.1 percent at 14,322.74. MSCI’s broadest index of Asia-Pacific stocks outside Japan climbed 0.3 percent. South Korea’s KOSPI  added 0.2 percent, while Australian shares jumped 0.6 percent. Chinese shares added to gains made on Wednesday after MSCI included mainland shares in its emerging market indexes. The blue-chip index rose 0.4 percent. Hong Kong’s Hang Seng was flat.

In Currency Markets the dollar eased versus the yen on Thursday as a recent rally tied to bets on another U.S. interest rate hike this year lost steam, while the New Zealand dollar rose after its central bank stopped short of aggressively trying to talk down the currency. The New Zealand dollar was the big mover during Asian trade, rising 0.4 percent on the day to $0.7248, edging back in the direction of a four-month peak of $0.7320 set last week. The U.S. dollar eased 0.2 percent against the yen to 111.15. The euro was little changed at $1.1168. Sterling held steady at $1.2670, after having risen 0.3 percent on Wednesday when the Bank of England’s chief economist, Andy Haldane, said he expected to back a British rate increase this year.

In Commodities Markets  oil prices rose on Thursday after U.S. crude and gasoline stockpiles fell, but worries over whether OPEC-led output cuts would be able to rein in a three-year glut continued to drag. Brent crude futures were 4 cents higher at $44.86 a barrel, after falling 2.6 percent in the previous session to their lowest since August last year. U.S. crude futures were up 6 cents at $42.59 a barrel. Crude inventories fell 2.5 million barrels in the week to June 16, surpassing analyst expectations for a decrease of 2.1 million barrels, as imports rose marginally by 56,000 barrels per day, the U.S. Energy Information Administration said on Wednesday.  Spot gold rose 0.5 percent to $1,252.30 per ounce.

In US Equity Markets  the S&P 500 and Dow stock indexes were weighed down by falling energy shares as oil prices fell on Wednesday and added to investor concerns about low inflation, while healthcare and technology stocks helped lift the Nasdaq Composite index. The Dow Jones Industrial Average fell 0.27 percent, to close at 21,410.03, the S&P 500 lost 0.06 percent, to 2,435.61 and the Nasdaq Composite added 0.74 percent, rising to 6,233.95. The Nasdaq biotechnology index was up 4.1 percent, on track for its biggest one-day gain since the day after Trump’s Nov. 8 election. Its biggest boosts were Celgene and Regeneron which both rose more than 5 percent and Biogen, which rose 4.7 percent.

In Bond Markets longer-dated Japanese government bond prices rose on Thursday and the yield curve continued to flatten due to outperforming super-long maturities. The super longs took their cues from U.S. Treasuries, which saw their yield curve flatten to almost 10-year lows overnight as investors evaluated the impact of hawkish Federal Reserve policy on the economy even as inflation measures are deteriorating. The 30-year JGB yield fell 1 basis point to 0.780 percent. The benchmark 10-year yield was flat at 0.055 percent.

Economic Calendar

  • 13:30 GMT+1 CAD Core Retail Sales m/m
  • 13:30 GMT+1 US Unemployment Claims