European Close Market Briefing – 10/10/2017 – by Arjun Lakhanpal

In European Equity Markets stocks traded cautiously as markets waited to see whether Spain’s Catalonia region would push for independence later in the day. Madrid’s IBEX stocks index fell 0.7 percent by midday and is now down almost 9 percent since May, though a sharp rise in the euro has also taken a toll. The FTSE 100 index picked up 0.2 percent to 7,519.38, led by financial and consumer goods stocks. BAE Systems PLC fell 0.2 percent as the defense contractor said it plans to cut roughly 2000 jobs in a bid to lower costs. Financial shares were higher, with Direct Line Insurance Group PLC tacking on 1.8 percent and lender HSBC Holdings PLC up 0.9 percent.

In Currency Markets the euro hit a one-week peak on Tuesday as Germany rang up its best month for exports in a year in August and expectations grew that the ECB may consider scaling back its asset purchases. The euro gained 0.5 percent to $1.1807, its strongest since Oct. 2, after overnight comments from Sabine Lautenschlaeger, an ECB executive board member, calling for the ECB to roll back asset purchases in 2018. Against the Japanese yen, the dollar was down 0.56 percent at 112.03 yen. An index that tracks the dollar against a basket of currencies was down 0.45 percent at 93.253. The Australian and New Zealand dollars were stronger, with Aussie up 0.54 percent at $0.7794 and with Kiwi rising 0.23 percent to $0.7082.

In Commodities Markets  oil rose to above $56 a barrel on Tuesday, supported by Saudi Arabian export cuts in November and comments from OPEC and trading companies that the market is rebalancing after years of oversupply. Brent crude was up 80 cents at $56.59 a barrel. U.S. crude gained 97 cents to $50.55. Saudi Arabia has cut November allocations by 560,000 barrels per day (bpd), in line with its commitment to an OPEC-led supply reduction pact.  Spot gold was up 0.7 percent at $1,292.40 an ounce, having touched its highest since late September at $1,293.40. Silver rose 1.5 percent to $17.19 an ounce, having touched a two-week high of $17.20. Platinum was up 2 percent at $929.80 an ounce, while palladium rose 0.5 percent to $934.25.

In US Equity Markets  the three major stock indexes scaled new records on Tuesday, helped by gains in energy stocks and in Wal-Mart on the back of the company’s $20 billion share buyback plan. The Dow Jones Industrial Average was up 0.22 percent, at 22,811.38, the S&P 500 was up 0.26 percent, at 2,551.33 and the Nasdaq Composite was up 0.34 percent, at 6,602.26. Wal-Mart rose 3.8 percent after the retail giant unveiled the buyback plan and forecast U.S. online sales would rise by about 40 percent in next fiscal year. Nvidia rose more than 3 percent after the chipmaker unveiled the first computer chips for developing fully autonomous vehicles.

In Bond Markets U.S. Treasury prices gained on Tuesday as investors were cautious ahead of a possible move by Catalonia to unilaterally declare independence from Spain as well as a heavy week of domestic economic data and bond and note auctions. Benchmark 10-year Treasury notes were last up 3/32 in price to yield 2.357 percent, down from 2.372 percent on Friday. The bond market was closed on Monday for the Columbus Day holiday.