European Close Market Briefing – 10/11/2017 – by Arjun Lakhanpal

In European Equity Markets stocks fell on Thursday as a series of underwhelming earning updates, including from industrial giant Siemens, prompted investors to take profits out of a market still trading near two-year highs. The pan-European STOXX 600 benchmark index fell 1.1 percent, suffering its biggest daily loss since end-June, while Germany’s DAX fell 1.5 percent. Siemens fell 3.7 percent. The German engineer posted a worse than expected 10 percent decrease in quarterly industrial profit and signaled a tough year ahead as it restructures its turbine and wind power businesses. Commerzbank rose 2.4 percent after it swung to net profit in the third quarter. The German bank reiterated it was still expecting to eke out a “slightly positive” net profit for the full year.

In Currency Markets the dollar edged lower against a basket of currencies on Friday and was set for its biggest weekly decline in a month as disappointment that a landmark U.S. tax overhaul may be delayed until 2019 put a brake on the currency’s recent rally. The dollar index, which tracks the greenback against six major currencies, was down 0.12 percent at 94.329. The Japanese yen strengthened 0.15 percent versus the greenback at 113.32 per dollar. The euro was up 0.17 percent to $1.166. The weaker greenback and a recent rise in oil prices helped the Canadian dollar hold near a two-week high on Friday. Sterling gained on stronger-than-expected data on trade and industrial output. The pound was up 0.49 percent at $1.3213.

In Commodities Markets crude oil were little changed on Friday as expectations OPEC and other producers will extend their production cut agreement were offset by forecasts U.S. output will continue to grow with prices holding near 28-month highs. Brent futures were up 0.2 percent, at $64.06 a barrel, while U.S. West Texas Intermediate crude was down 1 cent at $57.16 per barrel. U.S. production is expected to rise to 9.2 million barrels per day (bpd) in 2017 and a record 10.0 million bpd in 2018 from 8.9 million bpd in 2016, according to federal energy projections this week.  Spot gold was down 0.1 percent at $1,283.61 per ounce and silver rose 0.1 percent to $17.01 per ounce.

In US Equity Markets stocks declined on Friday as the markets grappled with concerns over delays in corporate tax cuts but a rise in media stocks helped limit the slide. The Dow Jones Industrial Average was down 0.19 percent, at 23,418.09, the S&P 500 was down 0.24 percent, at 2,578.34. The Nasdaq Composite was down 0.22 percent, at 6,734.99. Shares of Nvidia were up 5.5 percent after the chipmaker’s revenue forecast for the current quarter topped estimates. Walt Disney rose 2.9 percent as the promise of a new film trilogy overshadowed weak quarterly results and struggles at the media company. Disney held talks in recent weeks about buying some of Twenty-First Century Fox’s film and TV businesses, according to media reports.

In Bond Markets U.S. Treasury yields rose on Friday, with two-year yields at a nine-year high as traders closed out some curve-flattener positions and dealers reduced their holdings of longer-dated debt following this week’s auctions. The 10-year Treasury yield reached a 1-1/2 week peak of 2.382 percent after hitting a near three-week trough of 2.304 percent two days earlier. The two-year yield hovered at a nine-yield high of 1.650 percent, which was up over 2 basis points on the day.