In Asian Equity Markets Japan’s Nikkei share average tracked a rise in global equities and advanced on Monday, although the dollar’s weakening against the yen capped gains. The Nikkei ended 0.26 percent higher at 23,714.88 for its first session of gains in four days. Index heavyweight SoftBank Group Corp rose as much as 5.8 percent after the Nikkei business daily reported that the telecoms conglomerate plans to list its mobile-phone business this year in an initial public offering. Sydney’s S&P/ASX 200 rose 0.12 percent, with the materials and gold producer sectors among the best-performing. Major miners BHP and Rio Tinto were up 1.17 percent and 1.46 percent, respectively. The Shanghai composite was off by 0.45 percent and the Shenzhen composite lost 1.53 percent.
In Currency Markets the US dollar was trading at three-year lows against a basket of currencies on Monday, while the euro stood tall on investors’ hopes that European Central Bank policymakers could be poised to further trim their monetary stimulus. The dollar index, which tracks the greenback against a basket of currencies, slipped 0.2 percent to 90.807 after falling as far as 90.773 earlier in the session, its lowest since January 2015. The euro added 0.1 percent to $1.2206, in sight of a peak of $1.2218 on Friday, its highest since December 2014, leaving some strategists to ponder where its next top might be. The dollar was 0.3 percent lower at 110.73 yen, after earlier falling as far as 110.63. Sterling edged up 0.1 percent to $1.3739, probing its highest levels against the dollar since the Brexit vote in June, 2016.
In Commodities Markets brent crude oil prices rose to $70 a barrel on Monday, supported by ongoing output cuts led by OPEC and Russia, and ignoring a rise in U.S. and Canadian drilling activity that points to higher future output in North America. Brent crude futures, the international benchmark for oil prices, were at $70 per barrel, up 13 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $64.53 a barrel, up 23 cents. Both benchmarks last week reached levels not seen since December 2014, with Brent touching $70.05 a barrel and WTI reaching as high as $64.77. U.S. energy companies added 10 oil rigs in the week to Jan. 12, taking the number to 752, energy service firm Baker Hughes said on Friday.
In US Equity Markets indexes rose to record highs on Friday as fourth-quarter earnings season kicked off with solid results from JPMorgan and BlackRock and robust retail sales drove gains for consumer stocks. JPMorgan, the biggest U.S. lender by assets, said the new tax law would help future profits by not only reducing the amount it pays the federal government but also by stimulating more business. The bank’s shares rose more than 1 percent. BlackRock rose 3 percent after the world’s largest asset manager reported profit that beat estimates as investors flooded into the relatively low-cost funds. The S&P consumer discretionary index jumped 0.78 percent after an increase in retail sales showed households bought more goods. The S&P 500 was up 0.50 percent, at 2,781.49. The Nasdaq Composite gained 0.59 percent, at 7,254.26.
In Bond Markets Treasury yields climbed on Friday as underlying U.S. consumer prices rose the most in 11 months in December, bolstering expectations of a pickup in domestic inflation and Federal Reserve interest rate hikes this year. The two-year yield, which is sensitive to traders’ views on interest rates, rose to more than 2 percent for the first time since the financial crisis. The yield on 10-year government notes was 2.55 percent, up from 2.53 percent at Thursday’s close. The yield on two-year government bills hit a high of 2.02 percent, its highest since September 2008, before falling slightly to 2.00 percent. Japanese government bonds mostly edged down on Monday, though longer maturities were underpinned by the fact that the Bank of Japan maintained the amount of its bond purchases in its buying operations.
Today’s inflection points
- 11:00 GMT+1 EUR Trade balance
- US Equity Trading will be closed on Monday for Martin Luther King day