European Open Market Briefing – 08/09/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei index fell near four-month lows on Friday while the broader Topix was almost flat as investors held off buying on concerns North Korea could launch another missile test on its important national holiday over the weekend. The Nikkei fell 0.4 percent to 19,322.74, near Wednesday’s four-month low of 19,254. The broader Topix was flat at 1,597.87. MSCI’s broadest index of Asia-Pacific stocks outside Japan added 0.5 percent, and was set for a 0.2 percent gain for the week. Australian stocks fell 0.3 percent, while South Korean stocks fell 0.2 percent. In Greater China, the Shanghai Composite rose 0.24 percent, while Hong Kong’s Hang Seng Index gained 0.61 percent.

In Currency Markets the euro reached a 2-1/2-year high versus the dollar on Friday, as a policy meeting by the European Central Bank gave bulls cause for short-term optimism and did little to support the beleaguered U.S. currency. The euro was up 0.5 percent at $1.2077 after touching $1.2092, its highest since January 2015. It has gained 1.8 percent on the week.  The dollar was down 0.6 percent at 107.760 yen following a descent to 107.700, its lowest since Nov. 14. The Swiss franc rose 0.9 percent to 0.9421 per dollar , its strongest since August 2015. The Australian dollar rose to $0.8119, its strongest since May 2015 and was last up 0.8 percent at $0.8112 against the broadly weaker dollar. The New Zealand dollar climbed 1.3 percent to $0.7325.

In Commodities Markets oil prices rose on Friday as U.S. crude production was hit harder by Hurricane Harvey than expected, with the even bigger storm Irma heading for Florida and threatening to cause more disruption to the petroleum industry. U.S. West Texas Intermediate crude futures were at $49.15 barrel, 5 cents above their last settlement. Brent crude futures were up 24 cents at $54.73 a barrel, just shy of their Friday peak of $54.79 a barrel, their highest level since April. U.S. oil output fell by almost 8 percent, from 9.5 million barrels per day (bpd) to 8.8 million bpd, according to the Energy Information Administration.  Spot gold was up 0.3 percent at $1,353.12, after earlier marking its strongest level since August last year.

In US Equity Markets stocks  ended little changed on Thursday after a moderate late-day rally as media stocks, which fell on negative business updates from Walt Disney and Comcast, were offset by gains in healthcare stocks. The Dow fell 0.1 percent, to 21,784.78, the S&P 500 lost 0.02 percent, to 2,465.1 and the Nasdaq Composite added 0.07 percent, to 6,397.87. Comcast fell 6.2 percent after the cable operator warned of subscriber losses, while Disney shares fell 4.4 percent after the company cautioned about its profit growth. Healthcare was the best-performing sector, rising 1.1 percent. AbbVie shares rose 6.1 percent and Bristol-Myers Squibb gained 5.0 percent after the drugmakers separately reported positive developments for their respective medicines.

In Bond Markets Japanese government bond prices gained on Friday, supported by weaker equities and a regular debt-purchasing operation by the Bank of Japan. The benchmark 10-year JGB yield was down 1.5 basis points at minus 0.005 percent and the 30-year yield fell 2 basis points to 0.810 percent. The benchmark U.S. Treasury yield stood at 2.042 percent US10YT=RR in Asian trade, down from its U.S. close of 2.061 percent. It fell a 10-month low of 2.03 percent on Thursday.

Economic Calendar

• 09:30 GMT+1 AUD RBA Gov Lowe Speaks
• 09:30 GMT+1 UK Manufacturing Production m/m
• 13:30 GMT+1 CAD Employment Change
• 13:30 GMT+1 CAD Unemployment Rate