European markets broadly advanced on the 5th, with short covering in the euro progressing against a backdrop of higher US yields and factors supporting a weaker yen. The report covers moves in major markets and trends in key indicators.
European equity markets generally trended higher at month-end, with buying in materials stocks in London lifting the market, while pharmaceutical stocks at times faced mounting selling pressure. Frankfurt posted only a modest gain, while concerns over France's fiscal position weighed on French stocks. European bonds came under selling pressure amid uncertainty.
Dollar-yen dipped to around ¥157.57 shortly after 17:00, but reports concerning GPIF's basic portfolio strengthened yen selling and dollar buying, with the pair temporarily updating its intraday high at ¥158.30. The US 10-year Treasury yield also rose to around 5.347% at one point, supporting the market.
Euro-dollar temporarily fell to $1.1161 in Asian trading, but short covering prevailed after European participants entered the market, limiting the decline near $1.1220. Euro-yen also fell to ¥176.22 before recovering to the ¥177.4 range after European participants entered the market.
Although the major UK and German stock indexes consolidated their moves, buying generally led trading in London, with gains in materials stocks standing out. Frankfurt extended gains modestly, while declines in French stocks weighed on the market. European bond markets came under selling pressure at times amid political and fiscal uncertainty.