European Open Market Briefing – 15/05/2017 – by A Lakhanpal

May 15, 2017 by

In Asian Equity Markets Japanese stocks edged down on Monday morning, pressured by a stronger yen, a widespread cyber attack, and North Korea’s missile test over the weekend. The Nikkei index fell 0.2 percent to 19,853.71 points in midmorning trade. The broader Topix fell 0.3 percent to 1,576.47 points, and the JPX-Nikkei Index 400 shed 0.2 percent to 14,080.66 points. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent to its highest level since June 2015. Chinese stocks added 0.35 percent, after the government soothed market fears of tighter regulation saying bank risks were “completely controllable.”

In Currency Markets the dollar started the week on the defensive on Monday after U.S. economic data came in shy of expectations and another missile test by North Korea at the weekend underpinned the perceived safe-haven yen. The dollar index, which tracks the greenback against a basket of six major peers, was 0.1 percent lower on the day at 99.152. The dollar fell slightly to 113.34 Japanese yen. The euro edged down 0.1 percent to $1.0924. The Aussie was up 0.2 percent at $0.7396, also getting a lift from firmer commodities prices. Stronger oil prices also bolstered the Canadian dollar. The U.S dollar sagged 0.2 percent to C$1.3678, moving away from a 14-month peak of C$1.3793 scaled earlier this month.

In Commodities Markets oil prices jumped over 1.5 percent on Monday after the energy ministers of the world’s two biggest producers Saudi Arabia and Russia jointly said that a crude production cut would be extended from the middle of this year until March 2018. Brent crude was at $51.65 per barrel, up 1.6 percent, from its last close to levels last seen in early May. U.S. West Texas Intermediate crude was at $48.62 per barrel, up 1.6 percent. Spot gold was up 0.2 percent at $1,231.06 per ounce. Among other precious metals, silver was up 0.6 percent to $16.55 per ounce. Platinum climbed 1.1 percent to $927 per ounce and touched the highest since May 2 earlier in the session. Palladium rose 0.4 percent to $809.30.

In US Equity Markets stocks fell on Friday, ending the week lower as tepid economic data weighed on banks and worries deepened over Nordstrom and other department stores. The Dow Jones Industrial Average declined 0.11 percent to end at 20,896.61 points and the S&P 500  lost 0.15 percent to 2,390.9. The Nasdaq Composite added 0.09 percent to 6,121.23. Nordstrom lost 10.84 percent after weak quarterly same-store sales. Macy’s fell 3.04 percent, bringing its loss to more than 19 percent in the past two sessions following its dismal quarterly report. GE was the top percentage loser on the Dow, down 2.08 percent after Deutsche Bank downgraded its shares to “sell” from “hold”.

In Bond Markets the U.S. Treasuries market rallied on Friday with the benchmark yield posting its biggest one-day decline in more than three weeks, as weaker-than-expected consumer inflation data in April diminished the view on whether Federal Reserve would raise interest rates more than once for the rest of the year. The benchmark 10-year Treasury yield fell 7 basis points to 2.329 percent.