European Open Market Briefing – 26/06/2017 – by Arjun Lakhanpal

June 26, 2017 by

In Asian Equity Markets Japan’s Nikkei index ticked up on Monday morning as the dollar-yen held steady, while investors’ attention fell squarely on Takata Corp after it filed for bankruptcy protection. The Nikkei rose 0.1 percent to 10,161.02 in midmorning trade. The broader Topix was up 0.1 percent to 1,612.60. The Tokyo Stock Exchange said shares of Takata would be delisted on July 27 after it filed for bankruptcy protection.MSCI’s broadest index of Asia-Pacific stocks outside Japan ticked up 0.4 percent. Trading was slow with many markets in the region closed for holidays to celebrate the end of Ramadan.

In Currency Markets the dollar drifted on Monday as U.S. Treasury yields stayed low amid fading expectations that the Federal Reserve will hike interest rates again later this year.  The greenback was steady at 111.290 yen, held below a near one-month high of 111.790 touched last Tuesday. The euro was effectively flat at $1.1192 after rising on Friday to a four-day high of $1.1209. Sterling was 0.25 percent higher at $1.2750 , its strongest in six days. The Australian dollar edged up 0.2 percent to $0.7580. The Aussie was battered earlier last week as crude oil prices decreased to 10-month lows, although it managed to trim some of the losses as oil prices settled.

In Commodities Markets oil prices rose more than 1 percent early on Monday on a weaker dollar, but another rise in U.S. drilling activity stoked worries that a global supply glut will persist despite an OPEC-led effort to curb output. Brent crude futures were up 1.1 percent, at $46.04 per barrel. U.S. West Texas Intermediate crude futures were up 1.0 percent, at $43.45 per barrel. Spot gold fell 0.2 percent to $1,254.00 per ounce. U.S. gold futures for August delivery fell 0.1 percent to $1,255.2 per ounce. Among other precious metals, silver was nearly flat at $16.69 per ounce. Platinum was also nearly flat at $925.60 per ounce. Palladium rose one percent to $860.50 per ounce.

In US Equity Markets  stocks ended higher on Friday after a last-minute trading spike and a technology sector gain offset weakness in financial stocks and sent the Nasdaq higher, giving it a weekly gain for the first time in three weeks. The Dow Jones Industrial Average closed down 0.01 percent, to 21,394.76, the S&P 500 gained 0.16 percent, to 2,438.3 and the Nasdaq Composite added 0.46 percent, to 6,265.25. Big technology stocks, including Apple, Facebook and Microsoft were the S&P 500’s biggest boosts on the day and sent up the tech sector 0.7 percent. The S&P financial index, fell 0.47 percent, with pressure from banking stocks after the stress test results and ahead of the second part of their test due on Wednesday.

In Bond Markets the Japanese government bond yield curve steepened on Monday as the 30-year yield pulled back from two-month lows. The 30-year yield was 1.5 basis points higher at 0.810 percent. Price losses were limited mainly to the super longs, with the benchmark 10-year yield standing unchanged at 0.050 percent. The 10-year/30-year yield spread steepened to 76 basis points from Thursday’s 73 basis points, which was its flattest since January.

Economic Calendar

  • 13:30 GMT+1 US Core Durable Goods Orders m/m
  • 18:30 GMT+1 EU ECB President Draghi Speaks