European Open Market Briefing – 29/06/2017 – by Arjun Lakhanpal

June 29, 2017 by

In Asian Equity Markets Japan’s Nikkei index rose on Thursday morning to hover near two-year highs after Wall Street rebounded, with tech shares, like Advantest Corp and Shin-Etsu Chemical, outperforming the overall market. The Nikkei gained 0.5 percent to 20,238.75 in midmorning trade, moving closer to 20,318.11 hit last week, the highest level since August 2015. Meanwhile, the broader Topix gained 0.8 percent to its near two-year high of 1,627.54. MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 0.8 percent to its highest since May 2015.

In Currency Markets the dollar wallowed at one-year lows against the euro and fell against sterling in Asian trade on Thursday as investors priced in tighter monetary policy in Europe. The euro was up 0.3 percent at $1.1410 after scaling a peak of $1.1420, despite evidence that positioning for a dramatic scaling-back of stimulus might have been overdone. The pound was up 0.2 percent at $1.2955. The divergent monetary policy outlooks helped bolster the dollar against the yen, but it still edged down 0.1 percent to 112.28. The euro was up 0.2 percent at 128.08 yen. The Australian dollar rose 0.2 percent to $0.7656 after earlier touching $0.7664, its highest since late March.

In Commodities Markets crude oil rose for a sixth straight session on Thursday to its highest since June 19 on a decline in U.S. output, but ongoing worries about global oversupply continued to drag. U.S. West Texas Intermediate crude had risen 0.6 percent, to $44.01 per barrel, while benchmark Brent futures gained 0.6 percent, to $47.59 a barrel. The U.S. Energy Information Administration (EIA) said crude stocks rose 118,000 barrels last week, while weekly production declined 100,000 barrels per day (bpd) to 9.3 million bpd. That was the biggest decline in weekly output since July 2016. Gold was up 0.3 percent to $1,253.09 an ounce.

In US Equity Markets stocks  rallied sharply on Wednesday, with the benchmark S&P 500 index scoring its biggest one-day percentage gain in about two months, as financial and technology stocks led a broad market rebound. The Dow Jones Industrial Average rose 0.68 percent, to 21,454.61, the S&P 500 gained 0.88 percent, to 2,440.69 and the Nasdaq Composite added 1.43 percent, to 6,234.41.  Financials were the best performing S&P sector, rising 1.6 percent. Bank stocks including JP Morgan Chase and Bank of America helped boost the S&P 500, both rising more than 2.0 percent. General Mills shares rose 1.6 percent after the Cheerios cereal maker reported a better-than-expected quarterly profit.

In Bond Markets long-dated U.S. Treasury prices weakened on Wednesday as central banks in Europe were deemed to strike a more hawkish tone, even after reports that markets had misinterpreted comments by European Central Bank President Mario Draghi on Tuesday. Benchmark 10-year notes fell 7/32 in price to yield 2.22 percent, up from 2.20 percent late on Tuesday. The yields rose as high as 2.256 before the ECB reports.

Economic Calendar

  • 13:30 GMT+1 US Final GDP q/q
  • 13:30 GMT+1 US Unemployment Claims