European Close Market Briefing – 12/09/2017 – by Arjun Lakhanpal

In European Equity Markets stocks rose to a five-week high on Tuesday, extending the relief bounce seen in the previous session as worries about Hurricane Irma and North Korea’s nuclear standoff eased. All major trading centers and most sectors ended in positive territory as the pan-European STOXX 600 gained 0.55 percent, although some investors questioned how sustainable current markets levels are. Volkswagen rose 1.9 percent after announcing a 20 billion euro plan to develop zero-emission vehicles and other constructors were also gaining ground, such as Peugeot which topped France’s blue chip CAC 40 index with a 3.8 percent rise. Financial stocks were yet again among the top performers, with banks and financial services up 1.6 and 1.1 percent respectively.

In Currency Markets the U.S. dollar on Tuesday clung to the previous day’s gains, supported by a bounce in Treasury yields and ahead of U.S. inflation data that could influence the timing of the next Federal Reserve interest rate increase. The Japanese yen weakened 0.62 percent versus the greenback at 110.10 per dollar. The euro was up 0.02 percent against the dollar at $1.1953. The dollar index, which tracks the currency against a basket of six major rivals, was up 0.05 percent at 91.92, after rising as high as 92.08. The Australian was steady, with Aussie at $0.8031, while Kiwi climbed 0.51 percent to $0.7291. Sterling advanced 0.79 percent to $1.3267.

In Commodities Markets oil prices rose almost 1 percent on Tuesday after OPEC said its output fell in August and forecast higher demand in 2018, indicating its production-cutting deal with non-member countries is helping to tackle a supply glut.  Brent crude rose 0.9 percent to $54.37 per barrel. U.S. West Texas Intermediate was up 0.7 percent to $48.40 a barrel. OPEC oil output by its 14 member countries fell in August by 79,000 barrels per day (bpd) from July to 32.76 million bpd, below a demand forecast. U.S. gold futures were down 0.3 percent at $1,331.80. Silver was flat at $17.80 an ounce after hitting its lowest since Sept. 1 at $17.67. Platinum was down 0.4 percent at $986.50, while palladium was 1.6 percent higher at $946.50 an ounce.

In US Equity Markets  the S&P 500 hit a record intraday high on Tuesday, led by gains in financial and industrial stocks after Irma weakened to a tropical depression, but declines in McDonald’s and technology stocks weighed on the Dow and Nasdaq. The was up 0.19 percent, at 22,100.27 and the S&P 500 was up 0.14 percent, at 2,491.47. The Nasdaq Composite was up 0.05 percent, at 6,435.64. Financials rose more than 1 percent, with the six major banks up between 1.2 percent and 2.5 percent. McDonald’s shares fell more than 3 percent on a report that a research firm had raised concerns about the restaurant chain’s third-quarter sales. DowDuPont rose 1.77 percent after the company said it was making changes to a plan of splitting itself into three.

In Bond Markets  U.S. long-dated Treasury yields hit two-week highs on Tuesday, rising for a third straight session amid a respite in geopolitical tensions in North Korea, with investors bracing for a 10-year note auction later in the session. In mid-morning trading, benchmark 10-year Treasury yields rose to 2.167 percent, from 2.125 percent late on Monday. Ten-year yields earlier hit 2.169 percent, a two-week high. U.S. 30-year bond yields rose to 2.772 percent, up from 2.739 percent the previous session.