European Open Market Briefing – 30/05/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei index fell on Tuesday, with the equity market feeling downward pressure from a stronger yen, which hurts big manufacturers’ export revenues. The Nikkei lost 0.5 percent to 19,487.71. The broader Topix lost 0.4 percent to 1,564.09 and the JPX-Nikkei Index 400 was also 0.4 percent lower, at 13,943.06.  MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.25 percent with U.S. and British markets closed on Monday. China, Hong Kong and Taiwan markets are closed for holidays on Tuesday. South Korea’s KOSPI fell 0.5 percent as investors took profits following the market’s record-breaking rally this month.

In Currency Markets the dollar firmed against a basket of currencies on Tuesday as the euro and sterling were pressured by political uncertainties in the UK and eurozone, even as it surrendered ground against the perceived safe-haven yen. Sterling fell 0.2 percent to $1.2816, moving back toward a three-week low of $1.2775 touched on Friday, while the euro lost 0.3 percent to $1.1128. The dollar fell 0.4 percent against its Japanese counterpart to 110.85 yen. The euro lost 0.7 percent to 123.82 yen after falling as low as 123.24, its weakest since May 18. The dollar index rose 0.2 percent to 97.659, pulling further away from a 6-1/2-month low of 96.797 plumbed last week.

In Commodities Markets a run by U.S. oil prices toward $50 a barrel ran out of steam on Tuesday as persistent concerns of oversupply outweighed signs of a strong start to the American summer driving season. U.S. West Texas Intermediate crude futures climbed above $50 per barrel in early trading on Tuesday, but fell back to $49.77, down 3 cents. Brent crude futures were at $52.09. per barrel, down 0.4 percent, from their last close.  Spot gold had risen 0.1 percent to $1,267.70 per ounce. Silver marked its highest level since April 27 at $17.45 an ounce. It was last up 0.4 percent at $17.43. Palladium was down 0.3 pct at $794.55. Platinum was unchanged at $952.70 an ounce.

In U.S., Equity Markets were closed for the Memorial Day holiday.

In Bond Markets  Italian government bond yields shot up on Monday as investors fretted over the possibility of parliamentary elections being held as early as this autumn after comments from former Prime Minister Matteo Renzi. Italian government bond yields jumped 10 bps at one stage, and though they fell back another 4 bps as the session wore on, it was still the outlier as most other euro zone bond yields were lower on the day by afternoon trading. The yield on Germany’s 10-year government bond , flat up to this point, then fell 2.5 basis points to a one-month low of 0.31 percent.

Economic Calendar

• 15:00 GMT+1 US CB Consumer Confidence
• 22:00 GMT+1 NZD RBNZ Financial Stability Report