European Close Market Briefing – 18/11/2017 – by Arjun Lakhanpal

November 18, 2017 by

In European Equity Markets disappointing earnings updates and a series of broker downgrades weighed on stocks on Friday, with regional indexes posting their second weekly fall in a row. The STOXX 600 was down 0.3 percent at its close, taking losses so far this week to 1.3 percent, its second negative week in a row. A speech from ECB President Mario Draghi in Frankfurt had little impact on stocks, even though traders said his tone was relatively upbeat on the economy. Among gainers, Vivendi rose 4.4 percent, reversing earlier weakness as investors digested an earnings update from the acquisitive French media conglomerate.

In Currency Markets the dollar edged lower against a basket of other major currencies on Friday, as investors remained skeptical of U.S. Republicans’ efforts to pass tax cuts after a barren first year for the Trump administration in Congress. The euro was up 0.16 percent to $1.1788. The greenback was down 0.54 percent against the Japanese yen.  The Australian and New Zealand dollars both headed for sizable weekly falls as their yield buffers over the U.S. dollar shrank to the smallest in over 17 years, undermining their appeal as carry trades. The greenback was up 0.59 against the Australian dollar, and the kiwi was down 0.8 percent. The dollar index was down 0.14 percent to 93.805.

In Commodities Markets  oil prices rose about 2 percent on Friday, capping five sessions of losses, on expectations of an OPEC deal to extend curbs on production and the shutting of a major U.S. crude pipeline.  Prices were still on track for their first weekly loss in six as rising U.S. output data was compounded by doubts that Russia would support an OPEC deal. Brent crude oil was $1.07 higher at $62.43 a barrel, while U.S. West Texas Intermediate crude rose $1.25 to $56.39 a barrel. Spot gold was up 0.6 percent at $1,285.39 per ounce. In other precious metals, silver was down 0.1 percent at $17.06 an ounce. Platinum rose 1 percent to $940.10 and palladium gained 0.1 percent to $988.25.

In US Equity Markets  main indexes were on track to post small weekly losses on Friday as investors were skeptical about the Republicans’ efforts to pass the tax bill. The Dow Jones Industrial Average was down 0.32 percent, at 23,382.89, the S&P 500 was down 0.14 percent, at 2,582.13 and the Nasdaq Composite was down 0.04 percent, at 6,790.56. Shares of Twenty-First Century Fox rose 4 percent after sources said Comcast and Verizon had expressed interest in acquiring a significant part of the company’s assets. Abercrombie & Fitch jumped 27 percent and Gap rose about 9 percent after the apparel retailers reported results that beat estimates. A surprise launch of a $200,000 sports car by Tesla, helped its shares rise about 3 percent.

In Bond Markets U.S. Treasury yields edged lower on Friday, in line with falls on Wall Street and declines in German 10-year bonds, as the yield curve continued to flatten following strong U.S. housing starts data for October. In midmorning trading, the 10-year Treasury yield fell to 2.350 percent, from 2.361 percent late on Thursday. The U.S. two-year yield climbed to a new nine-year peak of 1.725 percent. It was last 1.717 percent, from 1.712 percent on Thursday. U.S. 30-year bond yields slid to 2.793 percent, down from Thursday’s 2.806 percent.