In Asian Equity Markets Japan’s Nikkei share average lost ground on Wednesday as mining, oil and shipping stocks lost ground, while Bitcoin-related stocks fell after the cryptocurrency’s value slid on worries about tighter regulations. The Nikkei fell 0.5 percent to 23,823.95. The mining, oil and shipping sectors under-performed, losing their recent strength. Inpex Corp slipped 2.2 percent, Showa Shell Sekiyu fell 2.1 percent and Mitsui OSK Lines shed 1.1 percent. The Shanghai composite bucked the overall downward trend to eke out slight gains, climbing 0.14 percent. The Shenzhen composite, however, slid 0.38 percent. Wanda Hotel Development jumped 4.51 percent as it announced that it would gain 434 million Hong Kong dollars ($55 million) after selling its stake in Wanda International Real Estate Investment to an unnamed third party.
In Currency Markets the US dollar fell to a three-year low against its peers on Wednesday, losing its earlier bounce as the euro edged back after shaking off a setback to Chancellor Angela Merkel’s chances of forging a “grand coalition” in Germany. The dollar index against a basket of six major currencies last stood little changed at 90.446 after hitting 90.113, its lowest since December 2014. The euro was 0.05 percent higher at $1.2266, writing off weakness seen overnight and going as high as $1.2323 earlier, its strongest since December 2014. The pound went as high as $1.3836, its strongest since June 2016. It last stood little changed on the day at $1.3792. The Canadian dollar was a shade weaker at C$1.2442 per dollar with immediate focus on the Bank of Canada’s monetary policy decision due later in the day.
In Commodities Markets oil prices gave away earlier gains on Wednesday as analysts warned of a downward correction after prices have gained more than 13 percent over the past month. Brent crude futures were at $69.07 a barrel, down from a high of $69.37 earlier in the day and 18 cents below their last close. U.S. West Texas Intermediate (WTI) crude futures were at $63.68 a barrel, down 5 cents from their last settlement. WTI rose to $64.89 on Tuesday, also the highest since December 2014. Gold prices edged up on Wednesday towards four-month highs hit early in the week, as the U.S. dollar fell to three-year lows against a basket of currencies. U.S. wheat futures edged higher for the first time in four sessions on Wednesday, though prices continued to trade near more than one-month lows as ample global supplies continued to weigh.
In US Equity Markets major indexes paused the rally on Tuesday, weighed down by weakness in General Electric shares and as lower oil prices dragged down the energy sector. The energy sector fell 1.2 percent as Brent crude oil shed some of its recent gains, falling nearly $1 per barrel. Industrials and materials were the other major laggards on the S&P, down 0.9 percent and 1.2 percent, respectively. General Electric fell 2.9 percent after raising the prospect of breaking itself up and announcing more than $11 billion in charges from its long-term care insurance portfolio and new U.S. tax laws. The S&P 500 lost 0.35 percent, to 2,776.42 and the Nasdaq Composite fell 0.51 percent, to 7,223.69. UnitedHealth rose 1.9 percent after the largest U.S. health insurer reported results that beat estimates and raised its 2018 earnings outlook. Viacom fell 7.0 percent after sources told Reuters CBS Corp and the company were not in active merger discussions.
In Bond Markets U.S. long-dated Treasury yields fell on Tuesday along with those of European bonds, after a Reuters report said the European Central Bank was not quite ready to end its bond-buying scheme at next week’s meeting. Long-dated U.S. yields earlier fell to one-week lows, while those on two-year notes rose after hitting a more than nine-year high last Friday. Benchmark yields were below Friday’s close despite recouping some losses. The benchmark 10-year Treasury yield slipped to 2.544 percent from 2.552 percent at Friday’s close. U.S. two-year yields, meanwhile, were at 2.018 percent, above 2.002 percent on Friday. Japanese government five-year yield climbed 1 basis point to minus 0.080 percent and the benchmark 10-year yield rose 0.5 basis point to 0.080 percent.
Today’s inflection points
- 11:00 GMT+1 EUR HICP inflation
- 11:00 GMT+1 EUR HICP – core inflation, final
- 15:15 GMT+1 USD Capacity utilization
- 15:15 GMT+1 USD Industrial production
- 15:15 GMT+1 USD Manufacturing production
- 16:00 GMT+1 CAD Bank of Canada rate decision
- 16:00 GMT+1 USD NAHB Housing Market Index
- 21:00 GMT+1 USD Fed’s Evans (non-voter, dovish) speaks
- 22:30 GMT+1 USD Fed’s Mester (voter, hawkish) speaks