European Open Market Briefing – 16/10/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei index rose to a fresh 21-year high on Monday morning as the dollar stayed steady against the yen, while index-heavyweight SoftBank rose on news that T-Mobile and Sprint plan to merge. The Nikkei climbed 0.6 percent to 21,284.40 in midmorning trade, and touched 21,347.07, the highest level since late 1996. MSCI’s broadest index of Asia-Pacific stocks outside Japan gained for a fifth day running to its highest level since late 2007. Australian stocks extended their winning streak to a fourth straight session to rise 0.6 percent, while the Shanghai Composite Index edged 0.1 percent higher.

In Currency Markets the euro was on the defensive early on Monday after Austria’s election and on concerns over Catalonia’s confrontation with Madrid, though the dollar also lacked momentum after soft U.S. inflation data. The euro fell as much as 0.25 percent in early trade and last stood at $1.1806, down 0.2 percent, falling further from a 2 1/2-week high of $1.1880 touched on Thursday. Against the yen, the dollar changed hands at 111.96 yen, little changed on the day, though it has bounced back from Friday’s low of 111.69, which was its lowest since late September. The dollar index, which measures the greenback against a basket of currencies, was a touch firmer at 93.207.

In Commodities Markets  oil markets jumped on Monday on concerns over potential renewed U.S. sanctions against Iran as well as conflict in Iraq, while an explosion at a U.S. oil rig and reduced exploration activity supported prices there. Brent crude futures were at $57.85, up 1.2 percent, from the previous close. U.S. West Texas Intermediate crude futures were trading at $51.89 per barrel, up 0.9 percent.  Spot gold was down 0.2 percent at $1,302.51 an ounce and silver was flat at $17.35 an ounce after hitting its highest since mid-September earlier in the session. Platinum eased 0.2 percent to $942.50 an ounce, while palladium was 0.4 percent higher at $992.40.

In US Equity Markets  stocks rose on Friday following upbeat economic data and gains in technology shares, pushing the Dow and the S&P 500 to a fifth straight week of gains. The Dow Jones Industrial Average rose 0.13 percent, to end at 22,871.72, and the S&P 500 gained 0.09 percent, to 2,553.17. The Nasdaq Composite added 0.22 percent, to 6,605.80. Bank of America  rose 1.5 percent after the lender’s profit topped estimates due to higher interest rates and a decrease in costs. But Wells Fargo lost 2.8 percent after it reported lower-than-expected revenue for the fourth straight quarter due to a decline in mortgage banking revenue. Apple was up 0.6 percent, while the S&P technology index was up 0.5 percent.

In Bond Markets U.S. Treasury yields fell to two-week lows on Friday after consumer price data showed still benign inflation, disappointing investors who had expected it to improve. Excluding the volatile food and energy components, consumer prices gained 0.1 percent in September. In the 12 months through September, the so-called core CPI increased 1.7 percent. Benchmark 10-year notes gained 13/32 in price to yield 2.278 percent, the lowest since Sept. 27, and down from 2.323 percent on Thursday.