European Close Market Briefing – 07/08/2017 – by Arjun Lakhanpal

In European Equity Markets declines in shares of PostNL, Paddy Power Betfair and health companies outweighed strong basic resources and energy stocks on Monday, sending European shares down after robust gains in the previous session. The pan-European STOXX 600 index ended 0.1 percent lower. Euro zone blue chips also lost 0.1 percent, while Germany’s DAX fell 0.3 percent and British stocks climbed 0.3 percent.  PostNL fell 5.1 percent after the Dutch postal company said full-year profits would come in at the lower end of expectations due to regulatory changes. Gambling firm Paddy Power Betfair lost more than 5.2 percent after the company said CEO Breon Corcoran would step down, though it named a new CEO to succeed him.

In Currency Markets the U.S. dollar edged lower on Monday, but clung to most of its gains following Friday’s robust U.S. jobs report, as investors await inflation data this week that may signal a turnaround in the currency’s weakness this year.  The greenback was up 0.14 percent against the yen to 110.83 yen and sterling was down 0.14 percent against the dollar. Meanwhile, the euro shrugged off an unexpected fall in German industrial production in June and rose 0.2 percent against the dollar to $1.1791. The British pound decreased to a 10-month low against the euro, as investors bet the Bank of England would keep interest rates at record lows for the coming months, while the European Central Bank moves towards tightening.

In Commodities Markets oil prices fell as much as 2 percent on Monday on selling triggered by a rebound in production from Libya’s largest oil field along with worries about higher output from OPEC and the United States.  Global benchmark Brent crude futures were down 1.39 percent, at $51.69 a barrel after trading as low as $51.37 a barrel. U.S. crude futures were down 1.6 percent, at $48.78 per barrel, after falling to a low of $48.54 a barrel. Gold prices edged lower on Monday, failing to gain support from a weaker dollar as investors digested sharp losses in the previous session and worried about further U.S. rate hikes. Spot gold was down 0.1 percent at $1,257.12 per ounce and silver fell 0.3 percent to $16.19 per ounce.

In US Equity Markets the Dow was little changed in late morning trading on Monday after eking out another record high at open, while the Nasdaq was boosted by gains in tech stocks. The Dow Jones Industrial Average was up 0.01 percent, at 22,094.79, the S&P 500 was up 0.03 percent, at 2,477.68. The Nasdaq Composite was up 0.29 percent, at 6,370.26. Six of the 11 major S&P sectors were higher, with the consumer staples and technology leading the advancers. Warren Buffett’s Berkshire Hathaway was down 1.29 percent after the company reported a decrease in second-quarter profit. Tyson Foods rose 4.77 percent after the No.1 U.S. meat processor reported better-than-expected quarterly profit and sales.

In Bond Markets U.S. Treasury yields were flat to slightly lower in choppy trading on Monday after Friday’s stronger-than-expected U.S. non-farm payrolls report, with no real influences ahead of government bond and corporate supply this week.  In late morning trading, U.S. 10-year yields fell to 2.263 percent from 2.269 percent late on Friday. U.S. 30-year bonds yielded 2.844 percent, unchanged from the previous day. U.S. two-year yields were at 1.358 percent, little changed from Friday. The yield on Germany’s 10-year government bond fell a basis point to 0.46 percent, close to the one-month low of 0.45 percent hit on Friday and well below the July high of 0.59 percent.