European Close Market Briefing – 15/12/2017 – by Arjun Lakhanpal

December 18, 2017 by

In European Equity Markets stocks fell on Friday, weighed down by weakness in the heavyweight banking sector and a decrease in retail stocks following a disappointing trading update from fashion brand H&M. The pan-European STOXX 600 lost 0.2 percent at the end of the session and posted a 0.3-percent fall over the week as resurfacing worries over political risk spurred profit-taking and offset continued optimism in the region’s economic recovery. H&M lost 13 percent, leading losers on the STOXX, after the world’s second largest fashion retailer reported an unexpected decline in quarterly sales as fewer shoppers visited its stores. The stock hit its lowest since April 2009 and posted its biggest one-day loss in 16 years.

In Currency Markets the U.S. dollar rose on Friday as Republican negotiators in the U.S. Congress put the finishing touches on a sweeping tax overhaul, raising expectations that the bill would be passed by year-end. The dollar index was last up 0.27 percent to 93.745. The euro was down 0.03 percent to $1.1774. The New Zealand dollar rose 0.36 percent after the country’s Finance Minister Grant Robertson said he was comfortable with the currency’s general trend. Against the Japanese yen, the dollar rose 0.27 percent to Y112.69. Sterling declined 0.75 percent to $1.3330. The Australian dollar was steady, with Aussie at $0.7665.

In Commodities Markets  oil prices were mixed on Friday, lingering below two-year highs on Friday as the continuing outage of a North Sea pipeline and OPEC-led production cuts supported prices, while climbing U.S. output kept a lid on gains. Brent crude futures were down 4 cents at $63.27 a barrel. U.S. West Texas Intermediate crude futures were up 25 cents at $57.29 a barrel. WTI hit a two-year high of $59.05 on Nov. 24. Gold prices were roughly unchanged on Friday as gains were capped by a rise in the dollar amid growing investor optimism on tax reform. Gold futures for February delivery rose by 0.04 percent, to $1,257.60 a troy ounce. Silver futures rose 0.85 percent to $16.07 a troy ounce.

In US Equity Markets  major indexes scaled new heights on Friday, with all the major sectors pushing higher as the long-awaited bill to lower corporate tax rates enters the final stretch. The Dow was up 0.6 percent, at 24,655.56. The S&P 500 was up 0.84 percent, at 2,674.4 and the Nasdaq Composite was up 0.99 percent, at 6,924.30.  Financial stocks rose 1.11 percent, led by gains between 1.2 percent and 1.7 percent in the six biggest U.S. banks. While the technology sector also gained, one notable decliner was Oracle The software maker fell 4.34 percent after it gave a disappointing forecast for its cloud business. CSX fell more than 8 percent after the railroad said its Chief Executive Hunter Harrison was taking medical leave, amid its controversial turnaround plan.

In Bond Markets  Greek 10-year government bonds yields hit an 11-year low on Friday, as recent upbeat economic data and a deal struck with its lenders encouraged investors to snap up Greek debt. Italy’s 10-year bond yields, trading at 1.80 percent , looked set to end the week around 21 basis points higher, its biggest weekly jump since early July.  Benchmark 10-year notes last fell 9/32 in price to yield 2.3762 percent, from 2.346 percent late on Thursday. The 30-year bond last fell 5/32 in price to yield 2.717 percent, from 2.71 percent late on Thursday.