European Open Market Briefing – 25/05/2017 – by Arjun Lakhanpal
May 25, 2017In Asian Equity Markets Japanese stocks edged up on Thursday as investors bought futures after the yen weakened in Asian trade, while a rise in index-heavyweights such as SoftBank supported sentiment. In midmorning trade, the Nikkei index edged up 0.5 percent to 19,849.10. MSCI’s broadest index of Asia-Pacific stocks outside Japan advanced 0.7 percent, hitting its highest level since June 2015, and bringing its gains so far this year to about 17 percent. The gains were led by South Korean stocks which rose 1.0 percent to record highs. Hong Kong’s Hang Seng gained 0.8 percent to its highest level since July 2015 while Taiwanese stocks hit 17-year highs. Mainland Chinese stocks bounced back 0.3 percent.
In Currency Markets the dollar was on the defensive on Thursday after the Federal Reserve dialed down on some of the more hawkish policy expectations in the market, while the euro edged back up toward a 6-1/2-month high. The dollar was little changed at 111.635 yen, pushed away from a one-week high of 112.130 scaled the previous day. The euro was 0.2 percent higher at $1.1240, making its way back toward the 6-1/2-month peak of $1.1268 touched on Tuesday. The Norwegian crown stood at 9.349 per euro for a gain of about 0.3 percent on the week.The Canadian dollar was at C$1.3405 per dollar after touching C$1.3402, its strongest since April 19. The Australian dollar was 0.1 percent higher at $0.7510.
In Commodities Markets oil prices rose by one percent ahead of an OPEC meeting on Thursday that is expected to extend output cuts into 2018, adding at least nine months to an initial six-month cut in the first half of this year. Brent crude futures were trading at $54.51 per barrel, up 1 percent from their last close. U.S. West Texas Intermediate crude futures were at $51.87, up 1 percent. Spot gold was nearly flat at $1,258.61 per ounce. U.S. gold futures were up 0.5 percent at $1,258.7 an ounce. Among other precious metals, silver was up 0.1 percent at $17.20 an ounce, while platinum was nearly unchanged at $944.20 an ounce. Palladium rose 0.3 percent at $765.25 an ounce.
In US Equity Markets stocks ended up slightly on Wednesday, with the S&P 500 hitting a record high close, after minutes of the Federal Reserve’s latest meeting showed policymakers view a rate hike coming soon. The Dow Jones Industrial Average was up 0.36 percent, to 21,012.42, the S&P 500 gained 0.25 percent, to 2,404.39 and the Nasdaq Composite added 0.40 percent, to 6,163.02. Lowe’s fell 3 percent after the home improvement chain reported a lower-than-expected profit and comparable sales. Jewelry retailer Tiffany lost 8.7 percent after posting a surprise decrease in comparable sales. Signet Jewelers, which reports on Thursday, was down 7.2 percent.
In Bond Markets U.S. Treasury yields fell on Wednesday on investor relief after the Federal Reserve signaled a gradual approach on raising interest rates and winding down of its massive $4.5 trillion worth bond holdings. Benchmark 10-year Treasury note yield fell more than 2 basis points at 2.257 percent, while 30-year bond yield declined 2 basis points to 2.294 percent. Two-year yield fell to over 2 basis points at 1.298 percent.
Economic Calendar
- 09:30 GMT+1 UK Second Estimate GDP q/q
- 13:30 GMT+1 US Unemployment Claims
