European Open Market Briefing – 25/08/2017 – by Arjun Lakhanpal

August 25, 2017 by

In Asian Equity Markets Japan’s Nikkei index rose on Friday morning as the dollar was steady against the yen, but activity was subdued as investors waited on speeches at the central bankers’ symposium in Jackson Hole, Wyoming, that began on Thursday. By the midday break, the Nikkei rose 0.5 percent to 19,440.36, after falling to more than a three-month low on the previous day. The broader Topix gained 0.4 percent to 1,597.78. MSCI’s broadest index of Asia-Pacific stocks outside Japan was up 0.25 percent.  China’s Shanghai Composite index jumped 1.5 percent to its highest level since January 2016. Hong Kong’s Hang Seng gained almost 1 percent. South Korea’s KOSPI climbed almost 0.1 percent and Australia’s S&P/ASX 200 index was little changed.

In Currency Markets the dollar was buoyant against the yen on Friday as some participants bought back the currency to square positions ahead of a meeting of central bankers in Jackson Hole, Wyoming. The U.S. currency was a shade firmer at 109.640 yen after gaining 0.5 percent overnight. The euro was 0.05 percent lower at $1.1796 following a subdued overnight session, during which it was bound to a tight $1.1818-1.1784 range. The Australian and New Zealand dollars were both steady at $0.7900 and $0.7210  respectively. The kiwi took a hit this week after the New Zealand government downgraded the country’s growth outlook for this fiscal year and next. It fell to a two-month low of $0.7192 on Thursday.

In Commodities Markets  oil prices rose on Friday as the U.S. petroleum industry prepared for potential output disruptions as Hurricane Harvey headed for the heart of the nation’s oil industry in the Gulf of Mexico.  U.S. West Texas Intermediate crude futures were at $47.76 a barrel, up 0.7 percent, from their last settlement. International Brent crude futures were at $52.42 per barrel, up 0.7 percent, from their last close. Spot gold was unchanged at $1,286.48 an ounce, after falling nearly 0.3 percent in the previous session. Silver edged up 0.2 percent at $16.96 an ounce, while platinum fell 0.6 percent to $972.50 an ounce. Palladium was up 0.1 pct to $932.70 per ounce.

In US Equity Markets  stocks fell on Thursday as political uncertainty in Washington kept investors cautious ahead of comments on monetary policy from central bankers gathered for their annual meeting in Jackson Hole, Wyoming. The Dow Jones Industrial Average fell 0.13 percent, to 21,783.4, the S&P 500 lost 0.21 percent, to 2,438.97 and the Nasdaq Composite fell 0.11 percent, to 6,271.33. Consumer staples, down 1.3 percent, were the worst performing of the 11 major S&P sectors, led lower by a 9.5 decline in J.M. Smucker after its posted disappointing results and lowered its earnings forecast. Dollar Tree advanced 5.6 as one of the best performers on the S&P 500 after the retailer’s profit and comparable sales beat estimates.

In Bond Markets the Japanese government bond market retained its bullish momentum and edged up on Friday, taking in stride a move by the central bank to trim the amount of debt it bought at a regular purchasing operation. The benchmark 10-year JGB yield declined by half a basis point to 0.015 percent, its lowest since May 2. Shorter-dated JGB maturities outperformed, with the five-year yield falling 1.5 basis points to a 3-1/2-month low of minus 0.135 percent. The 30-year yield nudged up half a basis point to 0.825 percent, pulling away from a near two-month low of 0.815 percent set on Thursday.

Economic Calendar

  • 09:00 GMT+1 EU German Ifo Business Climate
  • 13:30 GMT+1 US Core Durable Goods Orders m/m
  • 17:00 GMT+1 US Fed Chair Yellen Speaks
  • 20:00 GMT+1 EU ECB President Draghi Speaks