European Close Market Briefing – 01/11/2017 – by Arjun Lakhanpal

In European Equity Markets stocks rose to two-year peaks on Wednesday, lifted by resilient company earnings and record highs set in Asia and New York, though a 6 percent decrease in Standard Chartered shares kept the banking sector under a cloud. The pan-European STOXX 600 rose 0.6 percent to 397.43 points, a level last seen in August 2015. Markets continued to brush off concerns over Catalonia’s independence bid, pushing Spain’s IBEX up 0.5 percent. While BNP Paribas shares extended the previous day’s 2.7 percent fall due to disappointment in its fixed income trading operations, Standard Chartered was Wednesday’s biggest loser, with its biggest daily fall in three months. Shares in Austria’s Raiffeisen bank also fell 2.1 percent.

In Currency Markets the dollar climbed on Wednesday, nearing a 3 1/2-month high against the yen, as investor optimism about the greenback ahead of major looming announcements on U.S. fiscal and monetary policy rose after strong economic data. The dollar was last up 0.45 percent against the yen  at 114.15 yen, eyeing its highest since mid-July of 114.44 yen. The greenback was also higher against the Swiss franc, up 0.4 percent at 0.9968 and nearing its highest since mid-May. The euro  fell to $1.1618. The New Zealand dollar rose as much as 1.2 percent to a one-week high of $0.6931 after data showed the country’s jobless rate had sunk to a nine-year low of 4.6 percent. The dollar index rose 0.25 percent to 94.771.

In Commodities Markets oil prices were steady in see-saw trade on Wednesday, hitting their highest since mid-2015 and then retreating after U.S. government data showed that the latest weekly draw in domestic crude stocks was not as big as an industry trade group had reported. The U.S. EIA said U.S. crude stocks decreased by 2.4 million barrels during the week of Oct. 27. Brent futures were down 0.3 percent, at $60.78 a barrel, while U.S. West Texas Intermediate crude was down 0.1 percent at $54.35. Spot gold was up 0.5 percent at $1,277.40 an ounce, having earlier peaked at $1,280.87. Silver rose 2.6 percent to $17.11 an ounce, while platinum climbed 2.2 percent to $935.50 an ounce. Palladium rose 2.1 percent to $1,001 an ounce.

In US Equity Markets  the S&P and the Dow were higher on Wednesday, as energy stocks gained from a jump in oil prices and strong private jobs data pointed to the strength in the labor market, while Apple’s 1 percent decrease limited gains on the Nasdaq. The Dow Jones Industrial Average was up 0.52 percent, at 23,498.15, the S&P 500 was up 0.40 percent, at 2,585.5 and the Nasdaq Composite was up 0.13 percent, at 6,736.22. Eight of the 11 major S&P indexes were higher, led by gains in the energy sector.  On Wednesday, cosmetics maker Estee Lauder, US Steel and Garmin all reported strong results. Estee Lauder rose nearly 10 percent, US Steel 11 percent and Garmin 5.51 percent.

In Bond Markets U.S. Treasury yields fell on Wednesday after the Treasury Department said it would keep auction sizes steady in the coming months, despite the Federal Reserve’s plan to reduce its bond holdings, but will announce changes in February. Benchmark 10-year note yields fell to 2.38 percent, from 2.40 percent before the announcement. The yield curve between five-year notes and 30-year bonds flattened to 83 basis points, the lowest level since late 2007.