European Open Market Briefing – 04/09/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei share average stumbled on Monday after North Korea conducted its most powerful nuclear test yet, and some traders expect more selling once the U.S. market reopens after a holiday. The Nikkei lost 0.8 percent to 19,527.75, falling from Friday’s two-week high while the broader Topix declined 0.9 percent to 1,605.15. MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.4 percent with South Korea’s main index down 0.6 percent. In China, the Shanghai Composite rose 0.14 percent and in Hong Kong, the Hang Seng Index eased 0.50 percent. The Australian stocks fell 0.54 percent.

In Currency Markets the yen edged higher against the dollar on Monday, as investors trimmed their exposure to riskier assets after North Korea conducted its most powerful nuclear test. The dollar fell to as low as 109.22 yen in early Asian trade and last fetched 109.81 yen, down 0.4 percent from late U.S. trade on Friday. The euro fell 0.3 percent against the yen to 130.47 yen. Against the dollar, the euro rose 0.2 percent to $1.1882, staying below a 2-1/2-year high of $1.2070 set last week. The Australian dollar traded at $0.7960, down 0.10 percent.  The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.25 percent to 92.59.

In Commodities Markets  oil markets were volatile on Monday, with U.S. crude rising on production shutdowns while international Brent was pulled down by a flight into gold futures following a powerful North Korean nuclear test explosion. U.S. West Texas Intermediate crude futures were at $47.42 barrel, 13 cents above their last settlement. Brent was at $52.54 per barrel, down 0.4 percent from the last close.  Spot gold rose 0.7 percent to $1,333.28 per ounce, earlier touching its best since Nov. 9 at $1,336.79. Silver rose 0.8 percent to $17.83 an ounce, earlier touching the highest since late April at $17.90 an ounce. Platinum gained 0.2 percent to $1,006.60 and palladium added 0.5 percent at $984.97.

In US Equity Markets stocks  gained modestly on Friday as a tepid U.S. jobs report kept expectations muted for another interest rate hike this year, while investors kicked off a typically dour month for stocks on a positive note. The Dow rose 0.18 percent, to 21,987.56, the S&P 500 gained 0.20 percent, to 2,476.55 and the Nasdaq Composite added 0.1 percent, to 6,435.33. Shares of major automakers climbed after the companies reported better-than-expected August sales and issued optimistic outlooks as Houston area residents replace cars and trucks after Hurricane Harvey. General Motors rose 2.2 percent and Ford Motor  gained 2.9 percent. Lululemon Athletica rose 7.2 percent after the yoga and leisure apparel maker reported profit and revenue that topped expectations.

In Bond Markets   U.S. Treasury yields rose on Friday as strong manufacturing data boosted sentiment that economic growth is solid, even after the August jobs report was weaker than economists expected. Benchmark 10-year yields fell to 2.10 percent in the immediate aftermath of the jobs data. They rose to 2.16 percent after the strong manufacturing figures.  The Institute for Supply Management said its index for factory activity rose to 58.8 in August, the highest reading since April 2011. U.S. consumer sentiment also climbed in August.

Economic Calendar

• 09:30 GMT+1 UK Construction PMI