European Opening Session – 04/04/2017 – by Arjun Lakhanpal

In Asian Equity Markets stocks inched lower on Tuesday as caution reigned ahead of a potentially tense meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping later this week.  MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.2 percent. Japan’s Nikkei fell 1.1 percent as automakers tumbled on weaker-than-expected U.S. sales and investors sought out the safe-haven yen. Australian shares slid 0.3 percent after the central bank voted to hold rates steady at a record low 1.5 percent as expected, while pointing out that growth in household borrowing, largely to buy housing, is outpacing increases in household income. China, Hong Kong, Taiwan and India were closed for holidays.

In Currency Markets the safe-haven Japanese yen gained broadly on Tuesday as a risk-averse mood spread through the broader markets, while the Australian dollar retreated to a three-week low after the country’s central bank raised concerns about domestic labor conditions. The dollar extended overnight losses and was down 0.4 percent at 110.440 yen after hitting 110.370, its lowest in a week. The euro lost 0.5 percent and the Australian dollar fell 0.7 percent against the yen. The euro was steady at $1.0668 after rising only about 0.2 percent overnight against the dollar. The Australian dollar lost more than 0.3 percent to reach a three-week low of $0.7578. The pound was a shade lower at $1.2475 after falling 0.7 percent overnight.

In Commodities Markets oil prices rose slightly on Tuesday due to a weaker dollar, though a rebound in Libyan production put pressure on the market and rising U.S. drilling signaled the potential for increased supply and capped price gains. International Brent crude futures were trading up 7 cents at $53.19 a barrel from the previous session. U.S. benchmark West Texas Intermediate crude oil prices were up 4 cents to $50.28 a barrel. Spot gold had risen 0.2 percent to $1,255.51 per ounce. Spot silver rose 0.2 percent to $18.27. The metal hit an over one-month high of $18.31. Platinum rose 0.5 percent to $956.10. It earlier touched a one-week high of $960.40. Palladium fell 0.2 percent to $800.55.

In US Equity Markets stocks  closed slightly lower on Monday as March auto sales disappointed and investors questioned whether the Trump administration would deliver on its pro-business economic stimulus. The Dow fell 0.06 percent, to 20,651.84, the S&P 500 lost 0.16 percent, to 2,358.92 and the Nasdaq Composite fell 0.29 percent, to 5,894.68. General Motors was one of the biggest drags on the S&P 500 after automakers’ sales figures for March came in below market expectations, an early signal America’s long car sales boom may finally be losing steam. GM finished down 3.4 percent while O’Reilly Automotive Inc, a car parts retailer, fell 4 percent. Fiat Chrysler sank 4.8 percent and Ford fell 1.7 percent.

In Bond Markets U.S. Treasury yields fell on Monday, with benchmark 10-year yields touching more than one-month lows, after weaker-than-expected U.S. auto sales and reallocation into U.S. government debt at the start of the quarter boosted demand. U.S. 30-year Treasury bonds were last up 25/32 in price to yield 2.978 percent, from a yield of 3.017 percent late Friday. U.S. 10-year Treasury notes were up 14/32 in price to yield 2.344 percent, from a yield of 2.395 percent late Friday.

Economic Calendar

• 09:30 GMT+1 UK Construction PMI
• 10:15 GMT+1 AUD RBA Gov Lowe Speaks
• 13:30 GMT+1 CAD Trade Balance
• 15:30 GMT+1 EU ECB President Draghi Speaks