European Close Market Briefing – 18/09/2017 – by Arjun Lakhanpal

In European Equity Markets stocks ended Monday’s session close to six-week highs, helped by buoyant global stock markets, stronger financials and a rally in Portugal after the euro zone member regained investment grade rating. With no new actions by North Korea over the weekend, economic recovery continued to whet appetite for the region’s equities and the pan-European STOXX index ended up 0.3 percent. Europe’s bank index contributed the most to lifting the overall index, with a 0.6 percent rise. Spain’s Banco de Sabadell rose 1 percent and so did Italy’s UniCredit. Ryanair  was a weak spot, down 1.8 percent following its announcement of plans to cancel between 40 and 50 flights per day until the end of October, disrupting hundreds of thousands of journeys.

In Currency Markets the U.S. dollar rose to a more than seven-week high against the yen on Monday, supported by a rise in U.S. Treasury yields, as traders waited on an impending Federal Reserve meeting for clues on whether U.S. interest rates could rise again by year-end. The dollar was up 0.49 percent against the Japanese currency at 111.38 yen. The euro was 0.1 percent higher against the greenback at $1.1956. Sterling hit a 15-month high against the dollar before retreating a notch as investors wound back some of last week’s bets on a Bank of England rate rise ahead of a speech by that central bank’s Governor Mark Carney. The dollar index, which tracks the greenback against six major currencies, was little changed at 91.877.

In Commodities Markets U.S. crude oil prices fell below $50 per barrel on Monday but stayed close to multi-month highs as traders braced for a potential stockpile build, expected later this week. U.S. West Texas Intermediate crude futures were down 16 cents at $49.73 per barrel, but still close to Thursday’s near-four month high of $50.50. Brent crude futures were 25 cents lower at $55.37 a barrel, near an almost five-month high of $55.99 touched on Thursday. Spot gold was down 0.6 percent at $1,311.51 an ounce. Silver fell 1.3 percent to $17.65 an ounce after touching its lowest since Aug. 31. Platinum lost 0.3 percent to $960.50, while palladium gained 0.9 percent to $931.72.70.

In US Equity Markets stocks  hit new life highs on Monday powered by financials, technology and industrials stocks even as investors await cues from the Federal Reserve on its future path of monetary policy. The Dow Jones Industrial Average was up 0.32 percent, at 22,339.5, the S&P 500 was up 0.23 percent, at 2,506.06 and the Nasdaq Composite  was up 0.32 percent, at 6,469.41. Ten of the 11 major S&P sectors were higher, led by a 0.59 percent gain in the financial index. Shares of the major banks Bank of America, Morgan Stanley, and Citigroup were up more than 1 percent. Boeing and Caterpilla rose more than 1 percent, providing the biggest boosts to the Dow, while Nvidia’s near 5 percent increase pushed the Nasdaq higher.

In Bond Markets U.S. Treasury prices fell on Monday as investors focused on the Federal Reserve’s two-day policy meeting this week for signals on whether an additional interest rate hike is likely this year. Benchmark 10-year notes were last down 6/32 in price to yield 2.222 percent. The yield fell to 2.016 percent on Sept. 8, the lowest level since Nov. 10. Portugal’s 10-year bond yield slid as much as 35 basis points to 2.45 percent, its lowest level since January 2016.

European Equity Upgrades/Downgrades

• GKN (GKN LN) UPGRADED TO NEUTRAL FROM UNDERPERFORM AT EXANE
• ADMIRAL GROUP (ADM LN) UPGRADED TO HOLD FROM SELL AT DEUTSCHE BANK
• ALTICE (ATC NA) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
• BPOST (BPOST BB) DOWNGRADED TO HOLD FROM BUY AT JEFFERIES
• TELIA COMPANY (TLSN SS) DOWNGRADED TO SELL FROM HOLD AT DEUTSCHE BANK
• TELENOR (TEL NO) UPGRRADED TO HOLD FROM SELL AT DEUTSCHE BANK