European Open Market Briefing – 23/08/2017 – by Arjun Lakhanpal

August 23, 2017 by

In Asian Equity Markets Japan’s Nikkei index rebounded on Wednesday morning after Wall Street gained as U.S. lawmakers’ comments on tax reform and the debt ceiling boosted investor appetite. The Nikkei rose 0.7 percent to 19,509.48 in midmorning trade, after falling for the fifth day on Tuesday to mark its longest losing streak since April 2016. The broader Topix rose 0.5 percent to 1,603.24.  MSCI’s broadest index of Asia-Pacific stocks outside Japan pulled back to stand little changed following a 0.7 percent rally on Tuesday. Australian stocks were down 0.3 percent and South Korea’s KOSPI gave back earlier modest gains to decrease 0.1 percent. Hong Kong markets were closed because of Hurricane Hato lashing the city. The Shanghai Composte fell 0.21 percent.

In Currency Markets the dollar edged down against the yen on Wednesday after U.S. President Donald Trump raised the spectre of a government shutdown to fulfil a campaign pledge, but overall moves among major currencies were limited ahead of this week’s Jackson Hole global central bankers’ conference. The dollar was last off slightly on the day at 109.53 yen after touching a low of 109.37. The euro eased slightly to $1.1760, staying on the defensive after shedding 0.5 percent on Tuesday. Australian dollar slid 0.30 percent to $0.7888, while Kiwi retreated 0.71 percent to trade at $0.7226. The dollar index was flat on the day at 93.513, after it gained 0.5 percent in the previous session.

In Commodities Markets oil prices fell on Wednesday, weighed down by concerns of oversupply as Libyan output improves and as U.S. gasoline inventories rose despite the peak summer driving season. Brent crude futures were at $51.75 per barrel, down 0.2 percent, from their last close. U.S. West Texas Intermediate crude futures were at $47.72 a barrel, down 0.2 percent. In the United States, crude inventories fell by 3.6 million barrels in the week to Aug. 18 to 465.6 million, industry group the American Petroleum Institute said Tuesday.  Spot gold was up 0.1 percent to $1,285.40 an ounce, after shedding 0.5 percent in the previous session. Silver rose 0.2 percent to $16.99 an ounce.

In US Equity Markets  stocks ended up on Tuesday, with each of the three major indexes posting their best one-day percentage gains in over a week, as lawmakers’ comments on tax reform and the debt ceiling boosted investor optimism. The Dow Jones Industrial Average rose 0.9 percent, to 21,899.89, the S&P 500 gained 0.99 percent, to 2,452.51 and the Nasdaq Composite added 1.36 percent, to 6,297.48. Freeport-McMoRan Inc  gained 2.31 percent on news that Indonesia expects to strike an agreement this month to allow the miner to keep operating its copper mine in Papua. Macy’s Inc rose 4.56 percent, scoring its best day in nearly seven months, after announcing restructuring and job cuts.

In Bond Markets benchmark Japanese government bonds were steady on Wednesday, while the prices of longer maturities edged down from their gains in the previous session following a solid 20-year auction. The 10-year cash JGB yield was flat at 0.035 percent, while the September 10-year JGB futures contract finished up 0.03 point at 150.77. But the 20-year JGB yield added one basis point to 0.550 percent, while the 30-year JGB yield was up half a basis point at 0.835 percent.

Economic Calendar

  • 08:00 GMT+1 EU ECB President Draghi Speaks
  • 15:30 GMT+1 US Crude Oil Inventories