European Open Market Briefing – 01/09/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei index edged up on Friday, echoing Wall Street gains, but trading was subdued as investors awaited U.S. job data for possible clues on the Federal Reserve’s next move on interest rates. The Nikkei gained 0.2 percent to 19,685.97 points by midmorning trade. The broader Topix was up 0.1 percent to 1,618.26.  MSCI’s broadest index of Asia-Pacific srocks outside Japan rose 0.3 percent. Australian stocks added 0.2 percent while South Korea’s KOSPI was little changed. Shanghai was up 0.5 percent and Hong Kong’s Hang Seng rose 0.3 percent.

In Currency Markets the dollar stayed off this week’s lows in cautious trading on Friday as investors awaited key monthly U.S. employment data after other tepid economic data cast doubts on whether the Federal Reserve will raise interest rates again this year. Against the yen, the dollar edged up 0.1 percent to 110.04, up 0.6 percent for the week and well above this week’s 4-1/2-month nadir of 108.265 yen. The euro edged down 0.1 percent to $1.1895, down 0.2 percent for the week but up more than 13 percent this year. Sterling was steady at $1.2920, as market participants were also eyeing a report on UK manufacturing activity due later in the day. The dollar index was up 0.09 percent at 92.67.

In Commodities Markets U.S. crude futures fell in Asian trading on Friday, partly reversing sharp gains from the previous session, amid ongoing turmoil in the oil industry with nearly a quarter of U.S. refining capacity offline. U.S. West Texas Intermediate was down 0.6 percent, at $46.96 barrel. The new Brent contract for November delivery was down 0.2 percent, at $52.78 barrel. Gasoline for September delivery settled up 13.5 percent, at $2.1399 on the last day of trading in the contract.  Spot gold fell 0.2 percent to $1,319.50 per ounce. Silver eased 0.2 percent to $17.53 per ounce. Platinum fell by 0.3 percent to $992.00 per ounce, while palladium edged up 0.2 percent to $934.97.

In US Equity Markets  stocks closed higher on Thursday as investors reacted to economic data and took cautious hope from Washington’s latest promises for long-awaited details of a tax reform plan. The Dow rose or 0.25 percent, to end at 21,948.1, the S&P 500 gained 0.57 percent, to 2,471.65 and the Nasdaq Composite added 0.95 percent, to 6,428.66. Ten of the 11 major S&P sectors were higher, with the health index’s 1.5 percent rise leading the advancers. UnitedHealth’s 1.5 percent gain provided the biggest boost to the Dow. The Nasdaq biotech index rose 2.8 percent, with the biggest boosts coming from Gilead, Celgene and Biogen, all of which rose more than 3 percent. Campbell Soup slid 8.1 percent after the company warned that sales for fiscal 2018 could fall.

In Bond Markets  U.S. Treasury prices gained on Thursday after consumer spending data showed continuing low inflation, and as tensions with North Korea kept up demand for the safe haven bonds. Benchmark 10-year notes gained 7/32 in price to yield 2.121 percent, down from 2.145 percent on Wednesday. Germany’s 10-year bond yield was up just 1 basis point at 0.37 percent early on Thursday, edging away from two-month lows hit earlier this week at 0.32 percent.

Economic Calendar

• 09:30 GMT+1 UK Manufacturing PMI
• 13:30 GMT+1 US Average Hourly Earnings m/m
• 13:30 GMT+1 US Non-Farm Employment Change
• 13:30 GMT+1 US Unemployment Rate
• 15:00 GMT+1 US ISM Manufacturing PMI