European Open Market Briefing – 25/09/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei index rose on Monday morning as a weaker yen lifted exporter shares, while expectations for a snap election continued to support overall sentiment. The Nikkei rose 0.6 percent to 20,414.93 by the midday break, after adding 1.9 percent last week and hitting a two-year high of 20,481.27. The broader Topix gained 0.6 percent to 1,673.69. MSCI’s broadest index of Asia-Pacific stocks outside Japan handed back earlier modest gains and was last down 0.35 percent with losses across the regions weighing.  Hong Kong’s Hang Seng was down 0.8 percent and Shanghai fell 0.3 percent after a number of Chinese cities rolled out new cubs to further slow home property sales. South Korea’s KOSPI shed 0.4 percent.

In Currency Markets the euro fell in early Asian trading on Monday after Germany’s election showed rising support for a far-right party that left Chancellor Angela Merkel scrambling to form a governing coalition. The euro fell as much as 0.5 percent to $1.1896 and last stood at $1.1933, down 0.2 percent, holding above support around $1.1860. The yen weakened 0.3 percent to 112.30 yen per dollar, helped by renewed hope of Prime Minister Shinzo Abe’s economic stimulus as he is expected to announce a snap election, to be held on October 22.  Political uncertainty also took a toll on the New Zealand dollar after no single party won a majority in an election over the weekend. The New Zealand currency fell 0.9 percent to $0.7269.

In Commodities Markets  oil prices stood little changed on Monday, keeping most of their gains from the previous session to hold near their highest levels in months, as major producers meeting in Vienna said the market was well on its way towards rebalancing. London Brent crude for November delivery was down 3 cents at $56.83 a barrel, near the highest since March. U.S. crude for November delivery was down 8 cents at $50.58, having risen 0.2 percent on Friday.  Spot gold fell 0.3 percent to $1,293.35 per ounce, not far from last week’s near one-month low of $1,287.61. Silver lost 0.2 percent to $16.91 per ounce. Platinum inched 0.1 percent lower to $929.70 per ounce and palladium gained 0.5 percent to $921.05 per ounce.

In US Equity Markets  the S&P 500 closed slightly higher on Friday even though Apple was a drag, as worries about Washington’s latest healthcare legislation proposal eased and investors shrugged off concerns about North Korea. The Dow Jones Industrial Average fell 0.04 percent, to 22,349.59, the S&P 500 gained 0.06 percent, to 2,502.22 and the Nasdaq Composite added 0.07 percent, to 6,426.92. Five of the 11 major S&P sectors ended the day lower and utilities led the decliners with a 0.7 percent loss. The small telecom services index, with only four stocks, was the biggest percentage gainer with a 1.4 percent rise on consolidation speculation while the energy index rose 0.5 percent as oil futures settled higher.

In Bond Markets U.S. Treasury prices gained on Friday on global concerns about North Korea after it said it might test a hydrogen bomb over the Pacific Ocean, and as investors closed positions before the weekend. Benchmark 10-year notes gained 7/32 in price to yield 2.26 percent, down from 2.28 percent on Thursday. The yield curve between five-year notes and 30-year bonds flattened to 91.1 basis points, the lowest level since late 2007, before steepening back to 92.3 basis points.

Economic Calendar

• 14:00 GMT+1 EU ECB President Draghi Speaks