European Close Market Briefing – 24/05/2017 – by Arjun Lakhanpal

In European Equity Markets stocks struggled to gain momentum on Wednesday, with strength in banks and big oil majors offset by weakness in miners and autos. The pan-European STOXX 600 index ended up 0.1 percent. Among the national markets, Britain’s FTSE 100 rose 0.4 percent, while Germany’s DAX fell 0.1 percent, weighed down by stocks including Hugo Boss and Evonik going ex-dividend. European auto stocks were the biggest sectoral fallers, down 0.6 percent. They were led lower by a 1.6 percent fall in Daimler, which extended losses after its sites were searched on Tuesday by German prosecutors in an emissions probe, and a 0.6 percent fall in Fiat Chrysler.

In Currency Markets the dollar hovered just above 6-1/2-month lows on Wednesday, as investors’ focus shifted from U.S. politics to monetary policy ahead of the release of the minutes of the U.S. Federal Reserve’s meeting in early May. Sterling fell to $1.2931, as investors continued to mull over recent polls over the weekend, showing the Labour Party had narrowed the large lead that had been enjoyed by the Conservative Party. The euro was up 0.1 percent against the greenback at $1.1193. Against the Japanese yen, the dollar rose by 0.24 percent to 112.05 yen. The dollar index, which tracks the greenback against six major rivals, was down 0.08 percent to 97.273.

In Commodities Markets  oil prices retreated slightly Wednesday as investors reacted to a smaller-than-expected U.S. gasoline stocks draw as they awaited the outcome of discussions in Vienna between OPEC and other oil-exporting countries on whether to extend output cuts. Crude inventories fell 4.4 million barrels in the week ended May 19, more than analysts’ forecasts of a 2.4 million barrels decline. Gasoline inventories fell only 787,000 barrels, compared with expectations for a 1.2 million barrel draw. Benchmark Brent crude oil was down 39 cents a barrel to $53.76. U.S. light crude was down 30 cents at $51.17.  Spot gold was at $1,251.83 an ounce, little changed from $1,250.76 late on Tuesday.

In US Equity Markets  stocks were modestly higher late on Wednesday morning, aiming for a fifth straight day of gains, as investors awaited Fed minutes of its May meeting that could cement the chances of an interest rate hike next month. The Dow was up 0.15 percent, at 20,969.58, the S&P 500 was up 0.08 percent, at 2,400.57 and the Nasdaq Composite was up 0.16 percent, at 6,148.34.  The consumer staples index fell 0.12 percent, weighed down by weak report from Lowe’s, the No. 2 U.S. home improvement chain. Lowe’s fell 4.3 percent after it reported a lower-than-expected profit and comparable sales. Bigger rival Home Depot was off 0.2 percent. Jewelry retailer Tiffany fell 6.8 percent after posting a surprise decrease in comparable sales.

In Bond Markets U.S. Treasury yields held steady on Wednesday, underpinned by demand for low-risk assets in the wake of Moody’s downgrade of China and the deadly suicide bombing in the English city of Manchester. The benchmark 10-year Treasury’s yield was last at 2.283 percent, flat from late on Tuesday, while the 30-year’s  was marginally lower at 2.939 percent. German 10-year yields climbed as much as 2 basis points to 0.43 percent on Wednesday.