In Asian Equity Markets Japan’s Nikkei share average extended gains on Tuesday, rising to its highest level since November 1991. The Nikkei was last up 1.2 percent at 24,099.32 after touching 24,115.21. Automakers recorded gains in the morning: Toyota rose 0.87 percent, Honda jumped 1.86 percent and Mitsubishi Motors tacked on 2.51 percent. Technology names were also mostly higher, with SoftBank Group advancing 2.16 percent. Across the Korean Strait, the Kospi added 1.01 percent despite automakers slipping into negative territory during the session. LG Electronics, meanwhile, traded flat after earlier falling more than 2 percent following news President Donald Trump had approved tariffs on certain washing machines. Samsung Electronics, which also produces washing machines, was higher by 1.41 percent.

 

In Currency Markets the yen ticked up slightly on Tuesday after the Bank of Japan kept monetary policy unchanged as expected but made tweaks to its views on inflation. The dollar had recovered from earlier losses after U.S. senators struck a deal to lift a three-day government shutdown but it remained mired near a three-year low against a basket of currencies on lingering concerns about its yield advantage being chipped away. The greenback fell 0.2 percent to 110.74 yen, edging near last week’s four-month low of 110.19, after the BOJ maintained its policy and its economic and price projections. The euro stood at $1.2258, consolidating its rally after having hit a three-year high of $1.2323 on Jan. 17. The British pound hit its post-Brexit referendum high of $1.4005, helped by optimism that Britain will reach a favorable divorce deal with the European Union.

 

In Commodities Markets oil prices rose on Tuesday, lifted by healthy economic growth as well as the ongoing supply restraint by a group of exporters around OPEC and Russia. U.S. crude oil futures rose 0.6 percent to $63.96 per barrel and Brent gained 0.5 percent to $69.38 per barrel . Spot gold rose 0.05 percent to $1,336.12 per ounce as the dollar steadied but lacked the momentum to  up gains.  Copper prices continued to climb on Tuesday amid a persistent weak dollar, even as official data showed China produced a record volume of refined copper in December. Platinum was nearly flat at $995.30 per ounce, down from over four-month highs touched in the previous session. In other precious metals, silver rose 0.1 percent to $17.03 per ounce. Palladium declined 0.2 percent to $1,095.99 per ounce.

 

In US Equity Markets stocks advanced on Monday as each of Wall Street’s main scored records in the wake of a deal by U.S. senators to end the federal government shutdown. Legislation to renew federal funding to the government cleared a procedural hurdle in the Senate and was expected soon to pass votes in the Senate and House of Representatives, allowing government to re-open through Feb 8. The S&P 500 gained 0.81 percent, to 2,832.97 and the Nasdaq Composite added 0.98 percent, to 7,408.03. Industrial stocks were one of the few laggards, as woes continued for General Electric, down 0.55 after BofA-Merrill Lynch downgraded its stock. GE fell below $16 for the first time since 2011 and is down nearly 8 percent for the year. The Nasdaq biotech index rose 3.15 percent to notch its best day since June 21 after a bunch of merger activity in the sector.

 

In Bond Markets Treasury yields rose on Monday after U.S. lawmakers reached a deal to reopen the federal government, three days into the shutdown. Yields recovered earlier intraday losses, rising to just below the multi-year highs set in early trading on Monday. Benchmark 10-year government yield hit 2.672 percent, the highest since July 2014, and close at 2.665 percent above its last close at 2.639 percent. The U.S. 2-year note yield was at 2.073 percent, after hitting 2.082 percent earlier in the day, its highest since September 2008. Japanese government bond prices edged up on Tuesday after the Bank of Japan kept its monetary policy on hold and largely maintained its economic projections, dropping no hint of a possible exit from its stimulus.


 

Today’s inflection points

  • 16:00 EUR GMT+1 Consumer confidence, preliminary
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