European Close Market Briefing – 05/05/2017 – by A Lakhanpal

In European Equity Markets stocks climbed out of the red and finished at a 21-month high Friday, as buying appetite for assets perceived as risky returned ahead of the French presidential election. The Stoxx Europe 600 index turned higher during the session, ending up 0.7 percent at 394.54, its highest since August 2015. France’s CAC 40 index finished up 1.1 percent at 5,432.40, sticking to its highest level since January 2008. Germany’s DAX 30 index closed at a record high, finishing up 0.6 percent at 12,716.89. Shares of oil companies swung higher as crude prices turned positive. BP PLC ended up 1.5 percent, Total SA rose 2 percent, and Eni SpA added 2.5 percent.

In Currency Markets the U.S. dollar hit its lowest level in roughly six months against the euro on Friday after data showing U.S. jobs growth rebounded sharply in April was not enough to shake investors’ bullishness toward the euro ahead of the second round of France’s presidential election. The euro hit $1.0991, its highest since early November 2016, after the U.S. jobs data and has risen to that level from a 14-year low of $1.0339 touched in early January. The dollar rose slightly against the yen and was last up 0.1 percent against the Japanese currency at 112.54 yen after the data, but remained below Thursday’s roughly seven-week high of 113.04 yen. The dollar index was last down 0.1 percent at 98.729.

In Commodities Markets  oil prices rebounded from five-month lows on Friday following assurances by Saudi Arabia that Russia is ready to join OPEC in extending supply cuts to reduce a persistent glut. Brent futures were up 2.5 percent, at $49.58 a barrel, while U.S. West Texas Intermediate crude was up 2.4 percent, at $46.61 per barrel. OPEC sources said on Thursday that OPEC is likely to extend cuts when it meets on May 25 but that a deeper cut is unlikely. OPEC and non-OPEC states initially agreed to cut 1.8 million barrels per day (bpd) in the first six months of 2017. Spot gold added 0.1 percent to $1,228.75 an ounce. U.S. gold futures gained 0.06 percent to $1,229.30 an ounce. Copper rose 0.76 percent to $5,585.00 a ton.

In US Equity Markets  stocks were little changed on Friday as a rebound in energy companies due to higher oil prices was offset by healthcare stocks and a sharp decrease in IBM. The Dow Jones Industrial Average was down 0.07 percent, at 20,936.36, the S&P 500 was up 0.11 percent, at 2,392.15 and the Nasdaq Composite was up 0.01 percent, at 6,076.16. IBM fell 2.2 percent to a six-month low of $154.96 after Warren Buffett said he sold nearly a third of his stake in the company.  The healthcare index was off 0.4 percent, leading the decliners. It had gained 0.6 percent on Thursday when the U.S. House of Representatives passed a healthcare overhaul. Cognizant gained 3.4 percent after the IT services provider’s profit beat estimates.

In Bond Markets the U.S. Treasury yield curve flattened on Friday after jobs growth in April rebounded and the unemployment rate fell to a near 10-year low, reinforcing the view that the Federal Reserve is likely to raise interest rates again in June. Nonfarm payrolls jumped by 211,000 jobs last month, the Labor Department said on Friday, well above the monthly average of 185,000 for this year and a jump from the gain of 79,000 in March. Benchmark 10-year notes gained 1/32 in price to yield 2.36 percent, little changed from Thursday