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03 Jan 2017 06:53 GMT+0 - Opening Wrap

In Asian Equity Markets stocks extending gains after European stocks rose to their highest in a year, while the dollar resumed its climb after last week's stumble. MSCI's broadest index of Asia-Pacific stocks outside Japan rose 0.4 percent as most regional markets reopened after the New Year holiday. It ended 2016 with a 3.7 percent gain, its best year in four. Japan was closed for an extended New Year holiday. Australian stocks were the best performers in the region with a 1.2 percent jump. Hong Kong's Hang Seng rose 0.5 percent. In China, both the CSI 300 index and the Shanghai Composite saw 0.8 percent gains. China was Asia's worst performing major stock market in 2016 with a 11.3 percent loss in its worst year in five.


In Currency Markets the U.S. dollar held quietly firm on Tuesday as the prospect of rising U.S. interest rates this year kept sentiment bullish, while a surprisingly upbeat reading on Chinese manufacturing gave the Aussie dollar a lift. A holiday in Japan made for thin trade, leaving the dollar steady around 117.35 yen, but well up on Friday's trough of 116.05. Against a basket of currencies, the dollar was 0.4 percent firmer at 102.600. The euro did creep higher from an early $1.0455 low to stand at $1.0485, but remained well short of the $1.0700 peak touched during Friday's brief spike. The Aussie got a lift to $0.7230 on Tuesday after a survey showed China's factory activity picked up in December, with output reaching a near six-year high.


In Commodities Markets oil prices rose in the first trading hours of 2017, buoyed by hopes that a deal between OPEC and non-OPEC members to cut production, which kicked in on Sunday, will be effective in draining a global supply glut. International Brent crude oil prices were up 0.6 percent, at $57.17 a barrel on Tuesday - close to last year's high of $57.89 per barrel, hit on Dec. 12. U.S. benchmark West Texas Intermediate crude oil prices were up 0.6 percent, at $54.03, not far from last year's high of $54.51 reached on Dec. 12.  spot gold was up 0.4 percent at $1,156.75 per ounce. In other precious metals news, spot silver rose 0.7 percent to $16.04 per ounce. Platinum was up over 1 percent to $911.40, while palladium rose 0.7 percent to $683.10.


In US Equity Markets  stocks slid on the last trading day of 2016 as losses in tech shares and discretionary companies weighed on the market. For the year, the S&P 500 climbed 9.5 percent, while the Dow Jones Industrial Average rose 13.4 percent for its best rally since 2013. The S&P 500 fell 0.5 percent Friday to 2,238.83, capping a weekly decline of 1.1 percent. The Dow Jones Industrial Average lost 57 points to 19,762.60. Financial stocks contributed most to the annual gain, with a 20 percent rally. Energy producers rose 24 percent in 2016, while health-care stocks lost 4.4 percent for the worst performance.


In Bond Markets  euro zone government bond yields edged down on Monday as the market started the new year on a firm note, with data giving further insight into inflation trends in the currency bloc on the horizon. German 10-year bond yields, the benchmark for borrowing costs in the euro area, fell 1 basis point to 0.20 percent but held above a seven-week low hit last week at 0.166 percent.



Economic Calendar

  • 10:30 GMT+0 UK Manufacturing PMI
  • 16:00 GMT+0 US ISM Manufacturing PMI


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