European Open Market Briefing – 22/09/2017 – by Arjun Lakhanpal

September 22, 2017 by

In Asian Equity Markets Japan’s Nikkei index fell in choppy trade early on Friday, moving away from two-year highs as rising geopolitical tensions over North Korea sapped risk appetite. The Nikkei fell 0.3 percent to 20,287.09 in midmorning trade, after opening in positive territory. For the week, the Nikkei is still up 2.0 percent. The broader Topix fell 0.3 percent, while the JPX-Nikkei Index 400 shed 0.2 percent. MSCI’s broadest index of Asia-Pacific stocks outside Japan handed back earlier gains and was down 0.4 percent after falling 0.7 percent the previous day. Shanghai was down 0.5 percent after S&P Global Ratings downgraded China’s long-term sovereign credit rating on Thursday.

In Currency Markets the dollar buckled on Friday as tensions simmered on the Korean peninsula, though the sharp divergence between U.S. and Japanese monetary policy kept the greenback on track for a winning week against the yen. The dollar fell 0.6 percent to 111.83 yen, but was still up 0.9 percent for the week, in which it scaled a two-month peak of 112.725. The euro edged up 0.1 percent to $1.1957 and was also up 0.1 percent for the week. The Swiss franc rose 0.2 percent to 0.9687 franc per dollar. The Australian dollar was down 0.2 percent at $0.7917 after sliding 1.2 percent the previous day. The dollar index, which tracks the U.S. unit against a basket of six major rivals, fell 0.3 percent to 92.024.

In Commodities Markets oil prices were mixed in early Asian trade on Friday as the market waited to see whether major oil producers would extend supply cuts beyond March at a meeting in Vienna later in the day. International benchmark Brent crude futures were at $56.35 a barrel, down 0.1 percent, from their last close. U.S. West Texas Intermediate crude futures were up 0.1 percent, at $50.60 per barrel. Gold edged up from a four-week low on Friday as the latest twist in tensions between the United States and North Korea prompted investors to seek out the safe-haven asset. Spot gold was up 0.2 percent at $1,293.70 an ounce after marking its lowest since Aug. 25 at $1287.61 in the previous session.

In US Equity Markets  stock indexes fell on Thursday as investors braced for a third interest rate hike this year and the United States ordered new sanctions against North Korea. The Dow Jones Industrial Average fell 0.24 percent, to 22,359.23, the S&P 500 lost 0.30 percent, to 2,500.6 and the Nasdaq Composite lost 0.52 percent, to 6,422.69. Only two of the 11 major S&P sectors – financials and industrials – were higher, with gains of 0.2 percent and 0.3 percent. The consumer staples index was the biggest decliner, down 0.97 percent decrease. Apple was the biggest drag on the three major indexes with a 1.7 percent decline on worries about demand for its latest smartphone.

In Bond Markets the U.S. Treasury yield curve flattened to two-and-a-half month lows on Thursday as investors adjusted for the likelihood of a December interest rate increase, a day after the Federal Reserve struck a more-hawkish-than-expected tone at its September meeting. The 10-year Treasury yield declined about 3 basis points to 2.251 percent as risk aversion favoured government bonds. It had risen for nine consecutive sessions prior, brushing a six-week high of 2.289 percent.

Economic Calendar

  • 09:00 GMT+1 EU ECB President Draghi Speaks
  • 13:30 GMT+1 CAD CPI m/m
  • 13:30 GMT+1 CAD Core Retail Sales m/m