European Close Market Briefing – 14/06/2017 – by Arjun Lakhanpal

In European Equity Markets stocks pulled back on Wednesday, as energy stocks fell on tumbling crude prices and banks were hit after weak U.S. data raised questions over future rate hikes in the world’s biggest economy. The STOXX 600 index fell 0.3 percent with the banks taking off most points from the pan-European index with a fall of 1.3 percent. Among utilities, France’s EDF rose 3.3 percent after appointing a new manager to run its British unit handling the construction of two nuclear reactors at Hinkley Point C. The Swedish measurement technology firm Hexagon rose 10.8 percent to a new record high after a Wall Street Journal report that it was in talks about a potential sale to undisclosed buyers.

In Currency Markets the dollar fell to its lowest since the day after the U.S. election against a basket of major currencies following the release of weaker-than-expected U.S. CPI and retail sales data on Wednesday. The euro  rose to its highest since Nov. 9 against the dollar, hitting $1.1295. Against the yen, the greenback fell by more than 1 percent following the data release to touch 108.95 yen, its lowest since April 21. The Australian dollar rose 1.3 percent to its highest against its U.S. counterpart since April 3. New Zealand’s dollar rose 1.25 percent to its highest since Feb. 7. The Canadian dollar rose 0.45 percent, hitting its highest against the U.S. dollar since Feb. 27.

In Commodities Markets oil prices fell more than 3 percent to their lowest in more than five weeks on Wednesday following U.S. data showing an unexpectedly large weekly build in U.S. gasoline inventories and International Energy Agency (IEA)data projecting a big increase in non-OPEC output in 2018. Brent futures were down 3.7 percent, at $46.91. U.S. West Texas Intermediate crude was down 3.8 percent, at $44.71 per barrel. The U.S. Energy Information Administration said gasoline inventories increased by 2.1 million barrels during the week ended June 9, while crude inventories decreased by 1.7 million barrels.  Spot gold was up 0.1 percent at $1,277.74 an ounce and silver was up 2.2 percent at $17.23 an ounce.

In US Equity Markets  stocks were flat in late morning trade on Wednesday as a set of weak economic data weighed on bank shares, while investors waited for the Fed to pull the trigger on a second interest rate hike this year. The Dow was down 0.01 percent, at 21,326.93. The S&P 500 was down 0.07 percent, at 2,438.68 and the Nasdaq Composite was up 0.06 percent, at 6,224.27. Johnson & Johnson rose 0.6 percent after the company’s flu drug succeeded in a mid-stage trial.  Facebook, Mircosoft and Alphabet, which had been hit hard by a selloff in the tech sector earlier this week, rose for the second straight day. H&R Block rose 10.6 percent after the tax preparation service provider’s fourth-quarter revenue and profit beat analysts’ expectations.

In Bond Markets medium- and long-dated U.S. Treasury yields fell to their lowest levels since November on Wednesday after disappointing U.S. inflation and retail sales data reduced expectations that the Federal Reserve would raise interest rates in the second half of the year. Benchmark 10-year Treasury yields and seven-year yields hit their lowest levels since Nov. 10 of 2.120 percent and 1.928 percent, respectively, while 30-year yields  hit their lowest since Nov. 9 of 2.791 percent and five-year yields hit their lowest since Nov. 17 of 1.689 percent.