European Open Market Briefing – 29/08/2017 – by Arjun Lakhanpal

In Asian Equity Markets  Japan’s Nikkei index fell to its lowest in almost four months on Tuesday, as a missile fired by North Korea over northern Japan put investors on edge and increased the yen’s safe-haven appeal. Japan’s Nikkei was down 0.9 percent to a four-month low at one point, then pared losses to be 0.5 percent off. The broader Topix fell 0.3 percent to 1,595.79. South Korea’s Kospi shed as much as 1.6 percent, helping to drag down MSCI’s broadest index of Asia-Pacific stocks outside Japan 0.6 percent. The Hang Seng Index fell 0.37 percent and the Shanghai Composite bucked the trend, up 0.13 percent. The South Korea Kospi index lost 1.55 percent. In Australia, the S&P/AX 200 fell 0.98 percent.

In Currency Markets the dollar hit a four-month low against the yen on Tuesday after North Korea fired a missile that passed over northern Japan, the latest act of provocation by Pyongyang that has ramped up global tensions. The dollar was down 0.4 percent at 108.81 yen. The euro was down 0.1 percent at $1.1969. Earlier on Tuesday the euro rose to $1.1986, its highest since January 2015.  The safe-haven Swiss franc hit a one-month high of 0.9498 franc to the dollar and last traded at 0.9523 franc on the dollar, up 0.3 percent. The Swiss currency gained 0.4 percent versus the euro to 1.1396 per euro. The dollar index against a basket of six major currencies was little changed at 92.207 by late morning, recouping early losses.

In Commodities Markets flooding from tropical storm Harvey caused ongoing large-scale U.S. refinery outages on Tuesday, while crude prices rose on the back of supply disruptions in Colombia and Libya. Refinery shutdowns from the storm helped push U.S. gasoline prices to $1.7799 per gallon on Monday, the most since 2015, although they receded slightly to $1.7374 per gallon on Tuesday. U.S. West Texas Intermediate crude futures rose 0.5 percent, to $46.80 a barrel, after falling more than 2 percent in the previous session. International Brent crude futures were up 0.4 percent, at $52.10 per barrel. Gold rose 0.9 percent to $1,324 per ounce, hitting its highest level since Nov 9.

In US Equity Markets  the S&P 500 and Dow ended little changed on Monday, with energy and bank shares lower as Tropical Storm Harvey crippled the U.S. energy hub in Texas, while tech and healthcare gave a light boost to the Nasdaq. The Dow Jones Industrial Average fell 0.02 percent, to close at 21,808.4, the S&P 500 gained 0.05 percent, to 2,444.24. The Nasdaq Composite added 0.28 percent, to 6,283.02. Kite Pharmaceuticals rose 28.0 percent after Gilead Sciences agreed to buy the immunotherapy developer in a deal valued at $11.9 billion. Shares of Gilead rose 1.2 percent. Expedia fell 4.5 percent after an internal memo by the online travel services company said its CEO, Dara Khosrowshahi, has been asked to lead Uber.

In Bond Markets U.S. Treasuries were steady on Monday as market participants waited on data that will culminate in Friday’s August employment report for further indications of the strength of the U.S. economy. Benchmark 10-year notes were last down 2/32 to yield 2.18 percent, up from 2.17 percent on Friday. Yields on Treasury bills that are due on Oct. 5 were elevated on Monday at 1.14 percent but below the high of 1.24 percent reached on Aug. 10.

Economic Calendar

• 15:00 GMT+1 US CB Consumer Confidence