European Close Market Briefing – 14/07/2017 – by Arjun Lakhanpal

In European Equity Markets stocks had their strongest week in more than two months as investors piled back into equities on signs that the world’s major central banks would likely not tighten monetary policy as quickly as some had feared. The pan-European STOXX 600 index inched up 0.1 percent while euro zone bluechips fell 0.2 percent.  Euro zone banks fell 0.7 percent, leaving them unchanged on the week after a strong performance last week. Swedish lender SEB jumped 1.3 percent after its second-quarter profit topped forecasts. Other Nordic stocks were also in focus as Norwegian insurer Gjensidige lost 6.5 percent to the bottom of the STOXX 600 after its second quarter results came in below forecasts.

In Currency Markets the dollar extended its earlier decline against a basket of major currencies on Friday, after weaker-than-forecast data on consumer prices and retail sales in June raised doubts about U.S. economic growth and whether the Fed would raise interest rates again in 2017. Against the Japanese yen, the greenback was down 0.62 percent to 112.57 yen.  The Australian dollar hit a near 15-month high as risk appetite was robust with global stock markets hitting record highs and after dovish comments from global policymakers. The Aussie was 1.13 percent higher against the greenback at $0.7813. The euro was up 0.37 percent against the greenback to $1.1437 and sterling was 1.07 percent higher at $1.3073.

In Commodities Markets oil rose 1 percent on Friday, boosted by a supply interruption in Nigeria and prices were headed for a weekly gain of more than 4 percent on lower U.S. stockpiles, but trading was volatile as global supply remained strong and some were concerned about economic growth prospects.  Brent crude futures were up 1.12 percent at $48.96 per barrel. U.S. West Texas Intermediate crude futures were up about 1.2 percent at $46.63 per barrel. Gold prices traded higher on Friday, benefiting from a decrease in the dollar to a ten-month low, following a pair of disappointing economic reports suggesting U.S. economic growth is not as robust as previously anticipated. Gold futures for August delivery rose by 0.86 percent, to $1,227.83 a troy ounce.

In US Equity Markets stocks edged higher in late morning trading on Friday as weak economic data dimmed chances of another rate hike this year, while tepid forecasts by JPMorgan and Wells Fargo limited gains. The Dow Jones Industrial Average was up 0.09 percent, at 21,573.5, the S&P 500 was up 0.17 percent, at 2,452.20. The Nasdaq Composite was up 0.19 percent, at 6,286.28. The financial index fell 1.03 percent and was the only laggard among the 11 major S&P sectors. Shares of JPMorgan fell 1.7 percent, Citigroup was down 1.1 percent and Wells Fargo fell 2.4 percent, despite their quarterly profits beating analysts’ expectations. Nutanix jumped 7.5 percent after Goldman Sachs added the cloud data-storage firm to its conviction list.

In Bond Markets U.S. Treasury yields fell to multi-week lows on Friday as benign U.S. inflation data in June and an unexpected fall in retail sales fueled doubts about an interest rate increase later this year.  In mid-morning trading, U.S. 10-year yield fell to 2.303 percent, from 2.348 percent late on Thursday. It earlier fell to 2.279 percent, its lowest since June 30. U.S. two-year yields slid as well, down to 1.339 percent , from Thursday’s 1.367 percent, after sliding to a three-week trough of 1.323 percent.