European Close Market Briefing – 04/07/2017 – by Arjun Lakhanpal

July 4, 2017 by

In European Equity Markets a spate of dealmaking news swept European stocks on Tuesday, with Worldpay rising after bid approaches, helping mitigate a broad based pull back from the previous session’s strong gains. The pan-European STOXX 600 fell 0.3 percent, in line with a decline in euro zone stocks and Britain’s FTSE index. Payments company Worldpay shares rose 27.7 percent to a record high after it received rival takeover approaches from credit card tech firm Vantiv and JPMorgan. This came after Danish rival Nets said on Monday it had received offers. Nets and another German rival Wirecard rose more than 4 percent. Shares in French rival EDF lost 4 percent after HSBC downgraded the stock to “reduce”.

In Currency Markets an unchanged stance on interest rates from Australia’s central bank dominated major currency markets on Tuesday, pushing the Australian dollar almost one percent lower and spurring a bounce for the yen from seven-week lows.  With the market quiet in the absence of U.S. trading, the dollar mainly drifted. It lost 0.2 percent on the yen to leave it buying 113.19 yen and fell 0.5 percent on the Canadian dollar, but made almost as much back against the Aussie dollar and Swedish crown and inched up to $1.1348 to the euro. The Aussie, which hit almost four-month highs in last week’s moves, fell 0.8 percent on the day to $0.7599.

In Commodities Markets Brent oil prices gained slightly on Tuesday, stabilizing near $50 a barrel on tentative signs that a persistent rise in U.S. crude production may be slowing. The international benchmark gained 15 cents to $49.83 per barrel. U.S. West Texas Intermediate crude futures were trading up 18 cents at $47.25 a barrel. Late May and most of June were overwhelmingly bearish as U.S. output rose and doubts grew over the ability of the Organization of the Petroleum Exporting Countries to hold back enough production to tighten the market. But sentiment began to shift towards the end of June, when data showed a decrease in U.S. oil output and a slight fall in drilling for new production.

In U.S., Equity Markets are closed for the Independence Day holiday.

In Bond Markets  borrowing costs across the euro area fell on Tuesday as signs that some ECB policymakers are having doubts about signalling a move away from an ultra-easy monetary policy stance this month brought a degree of comfort to a battered bond market. The yield on Germany’s 10-year Bund fell to 0.45 percent at one stage. Though it rose again, it was still down 2 bps on the day at 0.48 percent, and off 3-1/2 month highs hit on Monday. The yield on the Greek 10-year government bond fell 7 basis points to 5.35 percent, the lowest level since December 2009.