European Close Market Briefing – 13/10/2017 – by Arjun Lakhanpal

October 16, 2017 by

In European Equity Markets stocks hit their highest in nearly four months on Friday, helped by gains in Bayer after the German drugmaker sold assets that will pave the way for its acquisition of Monsanto. The pan-European STOXX 600 ended the session up 0.4 percent, also underpinned by strength among steel-exposed materials stocks, with ArcelorMittal jumping 7.4 percent. Germany’s DAX hit a record high and closed with a 0.1 percent gain. Britain’s FTSE fell 0.3 percent after a record close on Thursday. Bayer was up 1.2 percent after BASF agreed to buy parts of its seed and herbicide businesses for 5.9 billion euros in cash. BASF fell 0.5 percent.

In Currency Markets the dollar fell against a basket of currencies on Friday after data showed U.S. consumer prices rose less than expected in September, pointing to muted inflation that could worry Federal Reserve officials. The dollar fell to 111.7 Japanese yen, its lowest since Sept. 26.  Sterling rebounded to trade up 0.32 percent at $1.3302. The euro hit a session high of $1.1855 against the dollar and was up 0.22 percent. The common currency was on pace for its biggest weekly rise in a month as investors put political concerns on the back burner and focused on expectations that the European Central Bank would outline plans to unwind its huge stimulus program. The dollar index was down 0.19 percent at 92.883.

In Commodities Markets  oil prices firmed on Friday as bullish news from strong Chinese oil imports and tensions in the Middle East put Brent on track for a nearly 3 percent weekly gain. Brent futures were up 1.8 percent, at $57.28 a barrel. U.S. crude was up 1.7 percent, at $51.46 per barrel. Chinese oil imports hit 9 million barrels per day (bpd) in September, data showed on Friday. Imports averaged 8.5 million bpd between January and September, solidifying China’s position as the world’s biggest oil importer. U.S. gold futures for December delivery were 0.5 percent higher at $1,302.40 an ounce. Silver was up 0.5 percent at $17.26 an ounce. Platinum was up 0.8 percent at $940.70 an ounce and palladium was 2 percent higher at $992.75.

In US Equity Markets a rise in technology stocks sent the major Wall Street indexes to record highs on Friday, but a decrease in health insurers kept the rally in check, while banks were little changed after mixed reports from Bank of America and Wells Fargo. The Dow Jones Industrial Average was up 0.15 percent, at 22,875.07, the S&P 500 was up 0.21 percent, at 2,556.35 and the Nasdaq Composite was up 0.31 percent, at 6,611.65.  The healthcare sector was down 0.27 percent as health insurers fell on news that President Donald Trump scrapped billions of dollars in Obamacare subsidies to private insurers for low-income Americans. Centene lost 5.72 percent, Molina Healthcare was down 4.82 percent and Anthem fell 3.10 percent.

In Bond Markets U.S. Treasury yields fell to two-week lows on Friday after consumer price data showed low inflation, disappointing investors who had expected it was improving. Benchmark 10-year notes gained 11/32 in price to yield 2.286 percent, the lowest since Sept. 27 and down from 2.323 percent on Thursday. Germany’s 10-year government bond yield fell more than 3 basis points to as low as 0.40 percent. Most euro zone bond yields were 3-6 bps lower on the day. Elsewhere, there was a slight underperformance of Austrian government bond yields, down 3 bps at 0.60 percent, ahead of national elections on Sunday.