European Close Market Briefing – 06/09/2017 – by Arjun Lakhanpal

In European Equity Markets stocks ended a choppy session slightly higher on Wednesday, with German stocks leading the charge higher as auto makers advanced after key ratings upgrades. After opening in negative territory, the Stoxx Europe 600 index rose 0.1 percent to close at 373.95 to snap a two-session losing streak. Auto makers in Germany helped prop up the DAX 30 index, which ended 0.8 percent higher at 12,214.54. The gain came as new car registrations in Germany rose 3.5 percent on the year in August. Shares of Daimler AG rose 3.2 percent after Goldman Sachs upgraded the auto maker to buy from neutral. Outside Germany, shares of Fiat Chrysler Automobiles NV jumped 4.3 percent after Barclays lifted the car manufacturer to overweight from equalweight.

In Currency Markets the U.S. dollar hit its lowest level against the Canadian dollar in more than two years on Wednesday after the Bank of Canada surprised many by raising rates, while the greenback was modestly lower against a basket of major rivals. The Bank of Canada (BoC) raised interest rates by 25-basis-points to 1 percent after a hike in July, putting Canada ahead of the curve in returning borrowing costs to more normal levels after they were slashed due to the 2007-2009 financial crisis. The dollar fell as much as 1.9 percent against the loonie to C$1.2140,  its lowest level since mid-June 2015. The dollar was last roughly flat against the safe-haven yen at 108.78 yen. The euro was last up 0.2 percent against the greenback at $1.1933.

In Commodities Markets oil prices rose on Wednesday as strong global refining margins and the reopening of U.S. Gulf Coast refineries provided a more bullish outlook after sharp decrease due to Storm Harvey. Brent had gained 51 cents to $53.89 a barrel. U.S. West Texas Intermediate crude futures were up 45 cents at $49.54 a barrel. Gold rose on Wednesday towards the one-year high hit earlier this week, boosted by tensions on the Korean peninsula and a lower dollar due to growing expectations the Federal Reserve will delay rate rises. Spot gold rose 0.1 percent to $1,339.58 an ounce. Elsewhere silver gained 0.4 percent to $17.96 an ounce, platinum rose 0.3 percent to $1,008.70 an ounce and palladium lost 0.6 percent to $952.22 an ounce.

In US Equity Markets the S&P and the Dow edged higher on Wednesday as energy and financial stocks rose, but gains were capped by worries over tensions on the Korean peninsula and a potential U.S. landfall of Hurricane Irma. The Dow was up 0.33 percent, at 21,825.03 and the S&P 500 was up 0.24 percent, at 2,463.84. The Nasdaq Composite was up 0.01 points at 6,375.58. Seven of the 11 major S&P indexes were higher, with a 1.52 percent rise in the energy index topping the gainers. United Continental fell 4.3 percent after it warned Hurricane Harvey and North Korea tensions would hurt its third-quarter results. Exxon’s 1.68 percent rise was the biggest boost to the S&P, while a more than 1 percent rise of Goldman Sachs and Home Depot shares propelled the Dow.

In Bond Markets interest rates on U.S. Treasury bills fell on Wednesday on investor hopes U.S. lawmakers would reach a deal to raise the federal borrowing limit before the government is expected to run out of cash at the end of September. The 10-year Treasury yield fell to 2.054 percent earlier Wednesday, the lowest since Nov. 10. Germany’s 10-year bond yield was up 1 basis point at 0.35 percent, up from one-week lows hit earlier at 0.325 percent.