European Close Market Briefing – 09/08/2017 – by Arjun Lakhanpal

In European Equity Markets stocks fell back on Wednesday as geopolitical tensions sent all major benchmarks into negative territory, accompanied by a slight uptick in volatility in what is typically a quiet period of summer trading for the market. The pan-European STOXX 600 ended the session 0.7 percent lower, while Euro zone stocks and blue-chips fell more than 1 percent. France’s CAC 40 fell 1.4 percent after a car hit a group of soldiers in a Parisian suburb in what was said to be a deliberate act, while Germany’s DAX was also down 1.1 percent as bond yields fell. Gold miners Randgold Resources and Fresnillo were  up 2.8 to 4.9 percent as investors rushed to the safety of gold. Banks meanwhile suffered heavy losses, down 1.4 percent.

In Currency Markets traditional safe-haven currencies including the Swiss franc and Japanese yen rose on Wednesday, boosted by worries about increased tensions between the United States and North Korea. The greenback lost 0.83 percent to a near two-week low against the Swiss franc and fell to 110.11 yen, its lowest in nearly two months against the Japanese currency. Against the dollar the euro was 0.16 percent lower. Sterling was little changed against the greenback at close to a 2-1/2-week low, having lost around 2 percent since the Bank of England last week voted 6-2 to keep interest rates on hold at their record lows. The dollar index was up 0.07 percent to 93.717, after rising as high as 93.888 earlier in the session.

In Commodities Markets oil prices edged higher on Wednesday after a report showed U.S. refineries processed record amounts of crude in the latest week, eating into inventories, although a surprise jump in gasoline stockpiles limited price gains. U.S. crude inventories fell 6.5 million barrels last week, government data showed, steeper than the expected decrease of 2.7 million barrels. Brent crude was up 14 cents at $52.28, after two days of declines. U.S. West Texas Intermediate crude gained 3 cents to $49.20. U.S. gold futures for December delivery gained 1.2 percent to $1,277.9 per ounce. Platinum gained 1.1 percent to $977.50 per ounce. Silver rose 2.4 percent at $16.82 per ounce, while palladium fell 1 percent to $890.95.

In US Equity Markets stocks were lower on Wednesday as investors scurried to safe-haven assets after President Donald Trump’s “fire and fury” warning to North Korea escalated tensions with the nuclear-armed nation. The Dow was down 0.24 percent, at 22,032.91, the S&P 500 was down 0.21 percent, at 2,469.63. The Nasdaq Composite was down 0.48 percent, at 6,339.72. Shares of Walt Disney were down 4.44 percent as investors doubted whether it can succeed with its plan to launch its own streaming services rather than rely on Netflix Inc to reach online viewers. Netflix was down 2.35 percent. Travel website operator Priceline fell 7.92 percent following a disappointing forecast.

In Bond Markets U.S. Treasury yields fell on Wednesday, with those on the benchmark 10-year note hitting a six-week low, as heightened tensions between the United States and North Korea stoked demand for U.S. government debt and other safe-haven assets. U.S. 10-year yields hit 2.212 percent, the lowest since June 28 and nearly 7 basis points lower than Tuesday’s close.  U.S. 30-year bond yields slid to a six-week trough of 2.790 percent, compared with 2.867 percent late on Tuesday. U.S. 2-year yields touched a low of 1.323 percent, matching a low hit four weeks ago.