European Open Market Briefing – 21/08/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei index fell to a fresh 3-1/2-month low on Monday as global investors remained cautious amid worries over whether the Trump administration will be able to implement growth boosting measures. The Nikkei fell 0.3 percent to 19,406.40 points by midmorning trade, after opening slightly higher. The broader Topix lost 0.2 percent to 1,593.49. MSCI’s broadest index of Asia-Pacific stocks outside Japan was barely in the black thanks to modest gains in China, but many markets, including Australia and South Korea, were in the red. Hong Kong’s Hang Seng Index gained 0.57 percent, while the Shanghai Composite advanced 0.21 percent.

In Currency Markets the dollar steadied on Monday, edging away from four-month lows against the yen plumbed in the previous session as investors turned their focus from political turmoil in Washington to the Federal Reserve’s annual central banking conference in Wyoming. The dollar was flat on the day at 109.22 yen, after falling to as low as 108.605 yen on Friday on concerns over President Donald Trump’s ability to push through tax reform and stimulus measures. On Monday, the euro was steady on the day against its major counterparts at $1.1757 and 128.41 yen. The dollar index, which tracks the greenback against a basket of six major rivals, was nearly unchanged on the day at 93.448.

In Commodities Markets oil markets were stable on Monday, largely holding on to Friday’s big gains even though rising U.S. output weighed on hopes the market will tighten after a 13 percent fall in U.S. crude inventories since March. Brent crude futures were at $52.70 per barrel, down a cent from their last close. U.S. West Texas Intermediate crude futures were at $48.54 a barrel, up 3 cents from their last settlement. Spot gold edged 0.1 percent higher at $1,285.91 an ounce. Among other precious metals, silver was unchanged at $16.93 an ounce, while platinum fell 0.2 percent to $972.70 an ounce. Palladium was little changed at $924 per ounce.

In US Equity Markets  stocks ended down slightly after another volatile session on Friday following the latest White House shakeup and increased focus on the outlook for the Trump administration’s agenda and post-election rally. The Dow Jones Industrial Average fell 0.35 percent, to close at 21,674.51, the S&P 500 had lost 0.18 percent, to 2,425.55 and the Nasdaq Composite was down 0.09 percent, to 6,216.53.  Nike’s 4.4-percent slide weighed the most on the S&P and the Dow, following dismal results from sporting goods retailers Foot Locker and Hibbett. Deere’s 5.4-percent fall was the biggest drag on the industrial sector after the farm equipment maker reported a second straight quarter of lower-than-expected sales.

In Bond Markets benchmark Japanese government bonds were steady on Monday, underpinned by firmer U.S. Treasuries and weaker Japanese stocks. The 10-year cash JGB yield was flat at 0.035 percent, while the September 10-year JGB futures contract was up 0.07 point in afternoon trading at 150.78, touching its highest intraday levels since June 7. In the superlong zone, the 20-year JGB yield edged down half a basis point to 0.555 percent, while the 30-year JGB yield was down half a basis point at 0.845 percent.  The benchmark 10-year U.S. Treasuries yield fell to 2.162 percent on Friday, its lowest since late June, before closing at 2.194 percent.