European Open Market Briefing – 23/05/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japanese stocks were flat on Tuesday morning as a risk-averse mood kept investors sidelined following an explosion in the English city of Manchester, which lifted the safe-haven yen and depressed some export-oriented shares. The Nikkei index fell 0.1 percent to 19,662.91 in midmorning trade. The broader Topix was up 0.1 percent to 1,568.40 and the JPX-Nikkei Index 400 was flat at 14,004.72. MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 0.2 percent on Tuesday to be near its highest level since June 2015. Korean stocks rose  0.9 percent to an all-time high. Chinese stocks reversed earlier losses and were up 0.4 percent. Hong Kong’s Hang Seng rose 0.3 percent to its highest level since July 2015.

In Currency Markets the pound fell against the yen after a suspected terrorist attack at a concert in Britain’s city of Manchester, while the euro hovered near a six-month high against the dollar on Tuesday after German Chancellor Angela Merkel said the currency was “too weak.” Sterling was down 0.2 percent at 144.36 yen after weakening to as much as 144.06. It was little changed against the dollar at $1.2992 and a touch lower at 86.60 pence per euro. The dollar was down 0.2 percent at 111.100 yen after a decrease to 110.860 and the euro slid 0.2 percent to 124.860 yen. The euro was 0.1 percent higher at $1.1247.  The Australian dollar rose 0.1 percent to $0.7489 and the New Zealand dollar nudged up 0.2 percent to a one-month high of $0.7010.

In Commodities Markets oil prices fell on Tuesday after U.S. President Donald Trump proposed the sale of half the country’s strategic oil reserves, even as producer club OPEC and its allies cut output to tighten the market. Brent crude futures were trading down 0.4 percent, at $53.64 per barrel. U.S. West Texas Intermediate futures were at $50.91, down 0.4 percent. Spot gold was up 0.1 percent at $1,261.55 per ounce. Among other precious metals, silver was flat at $17.12 an ounce. Platinum was up 0.2 percent at $948 an ounce, hovering near its highest in more than three weeks hit on Monday. Palladium was nearly unchanged at $770.22 per ounce.

In US Equity Markets  stocks rose on Monday, boosted by technology stocks and by defense companies, which gained after the United States and Saudi Arabia signed a multi-billion dollar arms deal. The Dow closed up 0.43 percent, to 20,894.83, the S&P 500 gained 0.52 percent, to 2,394.02 and the Nasdaq Composite added 0.82 percent, to 6,133.62. Shares of General Dynamics, Raytheon and Lockheed Martin all hit record highs early on but ended off those levels, with gains of between 0.6 percent and 1.6 percent. Boeing gave the Dow its biggest boost, ending up 1.6 percent. Ford was up 2.1 percent after the automaker named James Hackett as chief executive, responding to investors’ growing unease about its stock price and prospects.

In Bond Markets U.S. Treasury yields were marginally higher on Monday as light selling tied to this week’s government and corporate bond supply overrode safe-haven bids underpinned by worries about probes into U.S. President Donald Trump’s 2016 campaign. The benchmark 10-year Treasury yield was 2.252 percent, up 0.7 basis point from Friday, while the 30-year yield was 2.914 percent, 0.8 basis point higher.

Economic Calendar

• 09:00 GMT+1 EU German Ifo Business Climate
• 10:00 GMT+1 UK Inflation Report Hearings