European Close Market Briefing – 13/11/2017 – by Arjun Lakhanpal

November 13, 2017 by

In European Equity Markets stocks closed lower on Monday for a fifth straight session, after French utility Electricite de France SA issued a profit warning, and on concerns about Brexit weighing on growth prospects for the eurozone. The Stoxx Europe 600 fell 0.7 percent to end at 386.13 for its lowest close since Sept. 27. France’s CAC 40 gave up 0.7 percent to end at 5,341.63, and Germany’s DAX 30 index fell  0.4 percent to finish at 13,074.42. The U.K.’s FTSE 100 on Monday fell 0.2 percent to end at 7,415.18. EDF lost 10 percent after the company cut its 2018 EBITDA target to a range of €14.6 billion to €15.3 billion, compared with a previous forecast of at least €15.2 billion. EDF said it faces “unfavorable developments” in France and the U.K.

In Currency Markets sterling fell to a one-week low against the U.S. dollar on Monday, buffeted by political headwinds that put it on course for its biggest daily loss in eleven days. Sterling was down 0.56 percent to $1.3114. Earlier it fell to $1.3188 its lowest since Nov. 6. The euro was little changed as investors awaited a conference on Tuesday where central bankers may share their thoughts on the global economy. The Canadian dollar weakened against its U.S. counterpart, paring some of its recent gains. Against the Japanese yen, the dollar rose 0.06 percent to Y113.63. The dollar edged higher against a basket of other major currencies on Monday, recovering ground after a 0.6 percent decline last week.

In Commodities Markets oil prices held steady in a tight range Monday after briefly testing lower, with support from Middle East tensions and record long bets by fund managers balanced by rising U.S. production. Brent crude futures  were down 26 cents a barrel at $63.27 a barrel, after touching a low of $62.61 a barrel. U.S. West Texas Intermediate crude futures were flat at $56.74 after falling earlier to $56.30.  Spot gold was up 0.2 percent at $1,278.31 an ounce, while U.S. gold futures for December delivery were up $4.20 an ounce at $1,278.40. Among other precious metals, silver was up 0.4 percent at $16.97 an ounce. Platinum was up 0.9 percent at $930.74 an ounce and palladium was down 0.4 percent at $990.50 an ounce.

In US Equity Markets stocks were little changed in late morning trading on Monday as GE’s dismal outlook weighed on indexes and investors fretted over the future of the U.S. tax reform plan. The Dow lost 0.01 percent, at 23,420.28, the S&P 500 was down 0.04 percent, at 2,581.36 and the Nasdaq Composite fell 0.1 percent, at 6,744.38. Qualcomm rose 1.44 percent after the chipmaker rejected rival Broadcom’s $103-billion takeover bid, saying the offer “dramatically” undervalued the company. General Electric fell 4.4 percent after the industrial conglomerate cut its 2018 profit forecast, slashed dividend and unveiled a restructuring plan. Toymaker Mattel jumped about 20 percent after a report that rival Hasbro has made an approach to acquire the company. Hasbro rose 6.6 percent.

In Bond Markets U.S. Treasury two-year note yields hit a fresh nine-year high on Monday as the yield curve resumed its flattening and investors priced in a 25-basis point interest rate hike by the Federal Reserve in December. In late-morning trading, the 10-year Treasury yield  was at 2.393 percent from 2.4 percent late on Friday. The two-year yield hit a nine-year peak of 1.679 percent, up from 1.662 percent last Friday.