European Open Market Briefing – 14/07/2017 – by Arjun Lakhanpal

July 14, 2017 by

In Asian Equity Markets Japan’s Nikkei index edged up on Friday and remained on track for a robust weekly gain, though investors grew cautious ahead of a long holiday weekend. The Nikkei index was up 0.2 percent at 20,144.82 at the end of morning trade. It was up 1.1 percent for the week. The broader Topix added 0.5 percent to 1,627.23, for a 1.3 percent rise for the week. The JPX-Nikkei Index 400 also added 0.5 percent, to 14,490.71. MSCI’s broadest index of Asia-Pacific stocks outside Japan advanced 0.25 percent to its highest level in two years. Chinese stocks bucked the positive trend, with the CSI 300 index falling 0.1 percent, and the Shanghai Composite down 0.2 percent. Hong Kong’s Hang Seng was unchanged.

In Currency Markets the dollar was little changed against a group of peers early on Friday, as currency investors remained cautious ahead of U.S. inflation data due later in the session, which is expected to set the greenback’s near-term direction. The greenback inched up 0.1 percent to 113.415 yen but still some distance away from a four-month peak of 114.495 struck on Tuesday. The euro was little changed at $1.1407. The Australian dollar touched a four-month peak of $0.7746. The New Zealand dollar traded at $0.7320 after climbing to an eight-month peak of $0.7369 on Thursday. The dollar index against a basket of major currencies was flat at 95.740, poised to end the week 0.25 percent lower.

In Commodities Markets oil markets fell on Friday, pulled down by high fuel inventories and improving industry efficiency, but were still on track for a solid weekly gain. Brent crude futures were down 0.1 percent, at $48.35 per barrel, but up 3.5 percent for the week. U.S. West Texas Intermediate crude futures were at $45.97 per barrel, down 0.2 percent, but up around 4 percent over the week. Gold lost ground on Friday in Asia as the US dollar gained ground and equity markets continued to climb. Nigeria reported on late Thursdday that it would limit its output of crude when production after output stabilizes at 1.8 million barrels per day.  Gold futures  for August delivery were down 0.11 percent to $1,216.00 as of mid-morning in Asia.

In US Equity Markets stocks  posted slight gains on Thursday and the Dow hit another record high close, with financials rising ahead of profit reports due Friday from several big U.S. banks. The Dow Jones Industrial Average rose 0.1 percent, to 21,553.09, the S&P 500 gained 0.19 percent, to 2,447.86 and the Nasdaq Compositeadded 0.21 percent, to 6,274.44. The financial index was the best performer among the 11 major S&P sectors, ending up 0.61 percent. Delta Air Lines Inc on Thursday reported a 21 percent decrease in second-quarter profit because of sharply higher operating costs, despite higher passenger unit revenue, sending its shares down about 1.8 percent.

In Bond Markets Japanese government bond prices tracked declines in their U.S. and euro zone counterparts and fell on Friday, with the market running out of momentum after two days of solid gains. The benchmark 10-year JGB yield was half a basis point higher at 0.080 percent. The five-year yield was half a basis point higher at minus 0.045 percent. U.S. Treasury yields rose on Thursday after falling for three straight days, tracking gains in German bond yields with solid U.S. economic data supporting their trend higher.

Economic Calendar

  • 13:30 GMT+1 CPI m/m
  • 13:30 GMT+1 Core CPI m/m
  • 13:30 GMT+1 Core Retail Sales m/m
  • 13:30 GMT+1 Retail Sales m/m