European Open Market Briefing – 11/08/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japanese stocks finished slightly lower after a choppy session on Thursday, as investors kept a wary watch on tension over North Korea ahead of Japan’s long weekend. The Nikkei finished down 0.1 percent, at 19,729.74, erasing early morning gains. The broader Topix shed 0.65 point to 1,617.25, while the JPX-Nikkei Index 400 shed 0.1 percent, to end at 14,367.56.  MSCI’s broadest index of Asia-Pacific stocks outside Japan skidded 1.4 percent in its third session of declines to a near one-month low. Australian stocks were down 1.3 percent. South Korea’s KOSPI fell 1.8 percent to a 9 1/2-week low, taking its losses this week to nearly 2.7 percent. Chinese bluechips lost 0.9 percent, while Hong Kong’s Hang Seng was 1.6 percent lower.

In Currency Markets the dollar set an eight-week low against the yen on Friday as escalating tensions between the United States and North Korea triggered yet more investor flight to safety. The dollar fell to as low as 109.11 yen in early Asian trade on Friday, its lowest level since June 14, when the greenback had fallen to as low as 108.81 yen. The euro eased 0.1 percent to $1.1766, staying below a high of around $1.1910 set last week, the euro’s strongest level in 2-1/2 years. The dollar pulled back 0.1 percent to $0.9635 Swiss francs on Friday, after falling as much as 1.2 percent to a two-week low overnight. The dollar was steady against a basket of six major currencies at 93.385 after falling 0.2 percent on Thursday.

In Commodities Markets  oil prices fell on Friday, dragged lower by persistent worries about oversupply despite a bigger-than-expected drawdown in U.S. crude inventories. Brent crude was down 0.58 percent, at $51.60 per barrel. U.S. West Texas Intermediate crude was down 0.64 percent, at $48.28 a barrel. Official data showed crude inventories in the United States fell sharply by 6.5 million barrels in the week ending to Aug. 4, as refiners ramped up run rates to the highest in 12 years due to strong demand.  Spot gold was up 0.2 percent at $1,287.90 per ounce. Earlier in the session, it marked its highest since June 8 an $1,288.52 an ounce.

In US Equity Markets  the S&P 500 index had its biggest one-day decrease in almost three months on Thursday as investors fled riskier assets, with technology stocks leading the charge, in response to an increasingly aggressive exchange of threats between the United States and North Korea. The Dow Jones Industrial Average closed down 0.93 percent, at 21,844.01, the S&P 500 lost 1.45 percent, to end the session at 2,438.21 and the Nasdaq Composite fell 2.13 percent, to 6,216.87. Macy’s shares closed down 10.2 percent and Kohl’s fell almost 6 percent as the companies continued to report a decrease in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off.

In Bond Markets  U.S. Treasury long-dated yields fell to six-week lows on Thursday, pressured by continued tensions between the United States and North Korea as well as weak economic data that reduced expectations of an interest rate hike in December.  In late trading, U.S. 10-year yields fell to 2.208 percent, a six-week low, from 2.242 percent late on Wednesday. U.S. 30-year bond yields fell to 2.783 percent, from Wednesday’s 2.818 percent. During the session, yields fell as low as 2.781 percent, a six-week low.

Economic Calendar

• 13:30 GMT+1 US CPI m/m
• 13:30 GMT+1 US Core CPI m/m