In Asian Equity Markets Japanese indexes were flat on Monday, with strength in securities and insurers offsetting falls in resources-related sectors including trading houses, steelmakers and shippers. The Nikkei index was flat at 23,816.33 and the broader Topix added 0.1 percent to 1,891.92. Nomura Holdings gained 0.7 percent, Daiwa Securities Group advanced 1.1 percent and T&D Holdings jumped 1.6 percent. Shippers were the worst performers, falling 1.6 percent, followed by a more than 0.8 percent decline in non-ferrous metal shares and steelmakers. Singapore shares were flat as gains in industrials were offset by lagging financial and consumer discretionary stocks. Index heavyweight Jardine Matheson Holdings Ltd rose as much as 3.1 percent, while United Overseas Bank Ltd fell up to 1.1 percent.
In Currency Markets the US dollar regained some footing on Monday after slipping earlier on a U.S. government shutdown, while investors took a relatively calm view of the Washington wrangling. The U.S. government shutdown took effect at midnight on Friday after Democrats and Republicans, locked in a bitter dispute over immigration and border security, failed to agree on a last-minute deal to fund government operations. The euro was mostly flat at $1.2227 failing to regain its three-year peak of $1.2323 that it scaled on Wednesday. The dollar pared its earlier losses and was little changed at 110.810 yen , still some distance from a four-month low of 110.190 marked on Wednesday. The pound fell 0.25 percent to $1.3868, pulling away from a 1-1/2-year top of $1.3942 reached on Wednesday following Friday’s disappointing UK retail sales data.
In Commodities Markets oil prices climbed on Monday, pushed higher by comments from Saudi Arabia that cooperation between oil producers who are currently withholding supplies would continue beyond 2018. Strong global economic growth and a drop in U.S. drilling activity also supported crude. Brent crude futures were at $68.89 a barrel, up 0.4 percent, from their last close. Brent on Jan. 15 rose to $70.37, its highest since December 2014. U.S. West Texas Intermediate (WTI) crude futures were at $63.61 a barrel, up 0.4 percent, from their last settlement. WTI climbed to $64.89 on Jan. 16, also its highest since December 2014. U.S. drillers cut five oil rigs in the week to Jan. 19, bringing the count down to 747, energy services firm Baker Hughes said on Friday.
In US Equity Markets main indexes rose on Friday, powered by gains in Amazon and Nike, while investors shrugged off fears of a looming U.S. government shutdown. Amazon rose 1.3 percent after it raised the monthly fee for its Amazon Prime service, while Nike was up 2 percent after Wedbush analysts upgraded the stock to “outperform”. Schlumberger reported a bigger-than-expected profit as the oilfield services provider benefited from higher oil prices. However, its shares fell 1.31 percent. The S&P 500 ended up 0.44 percent, at 2,810.30 and the Nasdaq Composite finished up , or 0.55 percent, at 7,336.78. IBM fell 2.8 percent despite posting its first revenue rise in 23 quarters. The company warned that a higher tax rate this year would eat into its profit.
In Bond Markets Japanese government bond prices were little changed across the board on Monday, with results of a liquidity-enhancing auction highlighting firm underlying investor demand for debt. The benchmark 10-year yield was unchanged at 0.075 percent. The 20-year yield fell half a basis point to 0.585 percent. The finance ministry sold 550 billion yen ($4.96 billion) of off-the-run JGBs on Monday with the auction drawing ample investor demand. The ministry regularly conducts these auctions in an attempt to enhance market liquidity. The bid-to-cover ratio, a gauge of investor demand at auctions, rose to 3.34 from the previous sale’s 3.13. The auction results helped offset negative pressures from U.S. Treasuries, which saw its 10-year yield edge up to a 3-1/2-year high amid the U.S. government shutdown.
Today’s inflection points
- No major economic releases or events