European Open Market Briefing – 26/10/2017 – by Arjun Lakhanpal

October 26, 2017 by

In Asian Equity Markets Japan’s Nikkei index edged up on Thursday, lifted by stocks backed by strong earnings and shrugging off Wall Street weakness. The Nikkei was 0.2 percent higher at the end of morning trading at 21,742.98. The broader Topix edged up 0.1 percent to 1,752.79, while the JPX-Nikkei Index 400 also rose 0.1 percent to 15,522.93. MSCI’s broadest index of Asia-Pacific stocks outside Japan was flat. In Greater China, the Shanghai Composite rose 0.46 percent, while the Hang Seng Index fell 0.12 percent. Australian index, S&P/ASX 200, edged down 0.07 percent.

In Currency Markets the euro inched higher on Thursday as investors awaited details of the European Central Bank’s plans for scaling back its bond- buying program, while the dollar took a breather after its recent rally. The euro inched up 0.1 percent to $1.1824, having edged up from a two-week low of $1.1725 that had been set on Monday. Against the yen, the dollar eased 0.2 percent to 113.54 yen, down from Wednesday’s three-month high of 114.245 yen. The Canadian dollar was a big mover, having slid 1 percent overnight to a three-month low of C$1.2816 per dollar  after the Bank of Canada left interest rates steady as expected, but sounded dovish in its policy statement. The loonie limped back slightly to C$1.2790 per dollar.

In Commodities Markets U.S. oil prices extended declines on Thursday after government data showed a surprise climb in U.S. crude inventories. NYMEX crude for December delivery was down 2 cents at $52.16 a barrel, after ending the last session down 0.6 percent. London Brent crude for December delivery was down 1 cent at $58.43. U.S. crude inventories rose by 856,000 barrels last week, U.S. Energy Information Administration data showed on Wednesday. Spot gold was up 0.2 percent at $1,279.96 an ounce. Silver rose 0.5 percent to $17 an ounce, while platinum and palladium were both 0.6 percent higher at $925.70 an ounce and $966 an ounce, respectively.

In US Equity Markets  stocks fell on Wednesday, with the Dow Industrials and S&P 500 indexes suffering their worst day in seven weeks, on a batch of soft quarterly earnings and a rise in bond yields. The Dow fell 0.48 percent, to end at 23,329.46, the S&P 500 lost 0.47 percent, to 2,557.15 and the Nasdaq Composite lost 0.52 percent, to 6,563.89. Downbeat earnings from AT&T sent shares in the United States’ second-largest wireless carrier down 3.9 percent, pulling down other telecom stocks Verizon and CenturyLink. Boeing, off 2.8 percent, surprised investors by revealing a $329-million charge for its troubled KC-46 aerial refueling tanker program in quarterly results.

In Bond Markets U.S. Treasury yields climbed on Wednesday, boosted by strong U.S. durable goods and new home sales data as well as speculation about President Donald Trump’s nominee to head the Federal Reserve. In afternoon trading, 10-year U.S. Treasury note yields rose to 2.440 percent, up from Tuesday’s 2.406 percent.  U.S. 30-year bond yields were up at 2.951 percent, from 2.923 percent late Tuesday. U.S. two-year note yields, meanwhile, were at 1.602 percent, up from 1.577 percent the previous session.

Economic Calendar

  • 12:45 GMT+1 EU Minimum Bid Rate
  • 13:30 GMT+1 EU ECB Press Conference
  • 13:30 GMT+1 US Unemployment Claims