European Open Market Briefing – 22/11/2017 – by Arjun Lakhanpal

November 22, 2017 by

In Asian Equity Markets Japan’s Nikkei index rose to a near two-week high on Wednesday, buoyed by gains in large-cap stocks such as SoftBank and Fanuc, and financial companies as global growth hopes lifted the mood across world markets. The Nikkei ended 0.5 percent higher at 22,523.15, the highest closing level since Nov. 10. The broader Topix gained 0.3 percent to 1,777.08. MSCI’s broadest index of Asia-Pacific stocks outside Japan added 0.4 percent to Wednesday’s 1.3 percent rise – the biggest gain in eight months, supported by energy and technology sectors. South Korea’s KOSPI climbed 0.4 percent and Australia’s benchmark S&P/ASX 200 index inched higher towards critical chart level of 6,000 points.

In Currency Markets the dollar treaded water against its peers on Wednesday, capped as U.S. Treasury yields failed to rise despite increasing investor risk appetite in broader financial markets. The greenback was a shade lower at 112.280 yen, after falling overnight from a high of 112.705.  The euro was steady at $1.1737 after crawling away from a one-week low of $1.1712 brushed overnight on the political impasse in Germany. The Australian dollar was 0.1 percent lower at $0.7568 after falling to a five-month trough of $0.7532 overnight on dovish-sounding Reserve Bank of Australia policy meeting minutes. The New Zealand dollar was steady at $0.6829 after digesting a surprise increase in October domestic milk production.

In Commodities Markets oil prices rose on Wednesday as ongoing cuts of piped Canadian crude to the United States added to falling U.S. crude inventories, while expectations of a prolonged OPEC-led production cut also offered support.  U.S. West Texas Intermediate crude futures were at $57.68 a barrel, up 1.5 percent from their last settlement. Brent crude futures were at $62.97 per barrel, up 0.6 percent. Spot gold was nearly unchanged at $1,280.20 per ounce. U.S. gold futures for December delivery were down 0.1 percent at $1,280.10. In other metals, silver was down 0.1 percent at $16.93 an ounce, while platinum fell 0.2 percent to $930.85. Palladium gained 0.1 percent to $999.55 an ounce.

In US Equity Markets  stocks jumped on Tuesday, pushing all three major indexes to record closing highs, led by gains in this year’s top-performing technology sector. The Dow Jones Industrial Average rose 0.69 percent, to 23,590.83, the S&P 500 gained 0.65 percent, to 2,599.03 and the Nasdaq Composite added 1.06 percent, to 6,862.48. Healthcare stocks also rose after bullish results from medical device maker Medtronic,  whose shares rose 4.8 percent after the company reported better-than-expected results and backed its full-year forecast. The S&P technology index gained 1.2 percent, helped by a nearly 1.9 percent rise in Apple. Signet Jewelers tanked 30.4 percent after reporting a surprise quarterly loss, pulling down Tiffany 0.8 percent.

In Bond Markets Japanese government bonds were mostly steady on Wednesday, with the exception of super-long yields which fell on prospect of Japan reducing the maturity’s issuance amount. The 40-year yield was 1.5 basis points lower at 0.965 percent. The 30-year yield stood unchanged at 0.810 percent after going as low as 0.805 percent. The five-year yield and the benchmark 10-year yield were unchanged at minus 0.135 percent and 0.025 percent, respectively.

Economic Calendar

  • 13:30 GMT+0 UK Autumn Forecast Statement
  • 14:30 GMT+0 US Core Durable Goods Orders m/m
  • 14:30 GMT+0 US Unemployment Claims
  • 16:30 GMT+0 US Crude Oil Inventories
  • 20:00 GMT+0 US FOMC Meeting Minutes
  • 22:45 GMT+0 NZD Retail Sales q/q