European Opening Session – 05/04/2017 – by Arjun Lakhanpal

In Asian Equity Markets stocks rose on Wednesday, helped by a bounce in Chinese shares, though the underlying sentiment was still cautious with investors wary of taking big positions before Presidents Donald Trump and Xi Jinping start their summit on Thursday. MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 0.4 percent with Shanghai and Hong Kong leading the region by rising of 0.8 percent and 0.4 percent. The Nikkei rose 0.3 percent to 18,873.34 in mid-morning trade, after falling to a 10-week low the previous day. The broader Topix was flat at 1,504.31 and the JPX-Nikkei Index 400 was flat at 13,468.21.

In Currency Markets the dollar regained some traction against the yen in Asian trade on Wednesday, but remained under pressure after North Korea fired a ballistic missile into the sea. The dollar edged up 0.1 percent to 110.85 yen, moving away from its overnight low of 110.27, but well below last Friday’s 10-day peak of 112.19 yen.  The euro, meanwhile, edged up 0.1 percent to $1.0681 after plumbing a three-week low of $1.0636 on Tuesday. The Australian dollar added 0.1 percent to $0.7569, pulling away from a three-week low of $0.7545 hit in the previous session. The dollar index was slightly down on the day at 100.50, as falling U.S. Treasury yields also gave investors little incentive to buy the greenback.

In Commodities Markets oil prices climbed to a one-month high on Wednesday on signs of gradual tightening in a market bloated by years of overproduction that has left storage tanks around the world brimming with unsold fuel. Prices for front-month Brent crude futures were at $54.40 per barrel, up 0.4 percent, from their last close. In the United States, West Texas Intermediate crude futures were up 0.5 percent, at $51.30 a barrel. Spot gold was steady around $1,255.12 per ounce. U.S. gold futures inched down 0.1 percent to $1,257.10. Spot silver fell 0.5 percent to $18.19 an ounce after touching one-month peak of $18.41 in the previous session. Platinum was down 0.2 percent to $956.55, while palladium fell 0.5 percent to $800.75.

In US Equity Markets  stocks were little changed on Tuesday, as investors stayed on the sidelines ahead of the first-quarter earnings season and fretted about President Donald Trump’s ability to deliver on tax reform and other promises. The S&P 500 gained 0.06 percent, to 2,360.16 and the Nasdaq Composite added 0.07 percent, to 5,898.61. Ralph Lauren fell 4.5 percent. The retailer’s struggles were seen as a worrying sign for a sector losing ground to online rivals. Nordstrom Inc closed down 5.5 percent, while L Brands Inc  fell 4.4 percent after a brokerage downgrade. American Airlineslost 3.7 percent after rival Delta Airlines Inc cut the forecast for a key revenue metric for the second time in less than a month. Delta shares fell 2.6 percent.

In Bond Markets  the price of short-dated Japanese government bonds rose on Wednesday after the Bank of Japan reduced purchase in those maturities less than expected, while those of longer maturities fell ahead of an auction the following day. The two-year JGB yield fell 1.5 basis point to minus 0.200 percent and the five-year yield fell 1.0 basis point to minus 0.135 percent. The 10-year JGB yield rose 0.5 basis point to 0.065 percent. The 20-year yield rose 1.0 basis point to 0.645 percent , while the 30-year yield gained 2.0 basis points to 0.875 percent.

Economic Calendar

• 09:30 GMT+1 UK Services PMI
• 13:15 GMT+1 US ADP Non-Farm Employment Change
• 15:00 GMT+1 US ISM Non-Manufacturing PMI
• 15:30 GMT+1 US Crude Oil Inventories
• 19:00 GMT+1 US FOMC Meeting Minutes