European Opening Session – 16/03/2017 – by Arjun Lakhanpal

March 16, 2017 by

In Asian Equity Markets Japanese stocks declined on Thursday, hurt by the dollar’s fall against the yen as the U.S. Federal Reserve signalled fewer future rate hikes than many expected and by Fast Retailing Co’s tumble on a media report. The Nikkei shed 0.1 percent to 19,557.35 in midmorning trade. MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 1.2 percent to its highest level since mid-2015. Shanghai stocks added 0.7 percent with investors seemingly untroubled as China’s central bank raised short-term rates for the third time in as many months. South Korea’s market climbed 0.6 percent.

In Currency Markets the euro stood tall on Thursday after Dutch election exit polls pointed to a comfortable win by the prime minister over his far-right rival, while the dollar wallowed at a one-month low after the Federal Reserve sounded less hawkish than anticipated on future rate rises. The euro climbed to a five-week high of $1.0746 on Thursday, after rising 1.2 percent overnight. The pound was 0.2 percent lower at $1.2267 after jumping 1.1 percent overnight. The dollar, which went as high as 115.195 yen earlier this week, last stood at 113.420.  The Aussie was down 0.3 percent at $0.7687 following its overnight rise of 2 percent to a three-week high of $0.7720. The New Zealand dollar fell 0.5 percent to $0.7006.

In Commodities Markets crude oil prices rose on Thursday to extend gains from the previous session after official government data showed U.S. stockpiles had eased from record highs.  U.S. West Texas Intermediate crude was up 0.6 percent, at $49.15 a barrel. Brent futures climbed 0.7 percent, to $52.15. They had their first increase in seven days on Wednesday, gaining 1.7 percent. Crude inventories fell 237,000 barrels in the week to March 10, contrary to analysts’ forecasts for an increase of 3.7 million barrels.  Spot gold had risen 0.6 percent to $1,226.21 per ounce and spot silver climbed 0.8 percent to $17.43 per ounce. Platinum was up 1.68 percent at $964.99 per ounce, while palladium advanced 1.1 percent to $771.50 per ounce.

In US Equity Markets stocks rose sharply on Wednesday after the Federal Reserve raised interest rates for the second time in three months, as expected. The Dow Jones Industrial Average rose 0.54 percent, to 20,950.1, the S&P 500 gained 0.84 percent, to 2,385.26 and the Nasdaq Composite  added 0.74 percent, to 5,900.05. The Russell 2000 index of small-cap stocks rose 1.5 percent, while financials on the S&P 500 were the worst-performing sector. Apple closed up 1.1 percent after RBC raised its price target on the stock. Twitter ended down 1.9 percent after a number of prominent accounts on the microblogging website were hacked. Exxon shares rose 1.2 percent and Chevron added 1.4 percent.

In Bond Markets Japanese government bonds firmed on Thursday after the Bank of Japan kept monetary policy steady, with JGBs tracking gains in U.S. Treasuries when the Federal Reserve hiked interest rates as expected but did not signal any changes to its outlook.  The benchmark 10-year JGB yield fell 1.5 basis point (bp) to 0.075 percent. In the superlong zone, the yield on 20-year JGBs fell 2 bps to 0.645 percent, while the 30-year JGB yield shed 2.5 bps to 0.835 percent.