European Close Market Briefing – 20/09/2017 – by Arjun Lakhanpal

September 21, 2017 by

In European Equity Markets stocks hovered in cautious trade on Wednesday ahead of a policy decision by the U.S. Federal Reserve, with rate-sensitive banking shares edging lower. The pan-European STOXX 600 was flat in percentage terms, helped by buoyant energy stocks and gains among the more defensive health care .SXDP sector, while euro zone blue chips retreated 0.1 percent. Deal-making was also in focus in Europe, with shares in steelmaker Thyssenkrupp rising more than 3 percent after it struck a preliminary deal with India’s Tata Steel to merge their European steel operations in a 50-50 joint venture. Spanish retailer Inditex fell 2 percent after the Zara-owner saw gross margins eroded in the first half due to a strong euro.

In Currency Markets the dollar edged lower on Wednesday, as investors waited to see whether the Federal Reserve would signal it may raise interest rates again later this year even as inflation has remained below its 2 percent goal. The index that measures the greenback against a basket of six major currencies was 0.07 percent lower at 91.732 and not far from the 2-1/2-year low struck on Sept. 8. The euro was unchanged at $1.1992. The New Zealand dollar gained 0.8 percent at $0.7378 after reaching its highest level in 6-1/2 weeks as one poll showed the country’s National Party pulled ahead of the rival Labour Party ahead of a general election this weekend. The Mexican currency was last up 0.5 percent at 17.71 peso per dollar following a 0.2 percent decline on Tuesday.

In Commodities Markets oil prices rose nearly 2 percent on Wednesday, despite a rise in U.S. crude inventories, with the market heading for its largest third-quarter gain in 13 years after the Iraqi oil minister said OPEC and its partners were considering extending or deepening output cuts. Brent crude futures rose 1.9 percent, to $56.20 a barrel, while U.S. West Texas Intermediate crude futures gained 1.8 percent, to $50.39. Crude inventories rose for a third straight week, building by 4.6 million barrels, about a million more barrels than forecast.  U.S. gold futures for December delivery were up 0.4 percent at $1,315.20. Silver was down 0.3 percent at $17.27 an ounce, platinum lost 0.1 percent to $947.50 and palladium was down 0.4 percent at $904.50.

In US Equity Markets  the S&P and the Dow were little changed on Wednesday but hovered near record levels as investors waited to hear from the Federal Reserve on future interest rate hikes this year while the tech-heavy Nasdaq was pulled lower by a decline in Apple. The Dow was down 0.01 percent, at 22,368.92, the S&P was down 0.07 percent, at 2,504.92 and the Nasdaq Composite was down 0.41 percent, at 6,434.82. Seven of the 11 major S&P sectors were higher, led by 0.51 percent gain in the telecom services sector. The iPhone maker’s shares fell 2.5 percent after reports that the company admitted to connectivity issues with its latest smartwatch. Adobe fell 4 percent after the Photoshop maker’s revenue forecast came in line with estimates.

In Bond Markets U.S. Treasuries prices gained slightly on Wednesday as investors awaited the conclusion of the Federal Reserve’s two-day meeting for new indications on whether the U.S. central bank is likely to raise interest rates against this year. Benchmark 10-year notes were last up in 3/32 price to yield 2.232 percent, from 2.243 percent on Tuesday. Most euro zone bond yields fell around 1-2 basis points on the day, with Germany’s 10-year yield – the benchmark for the region – lower 1 basis point at 0.44 percent.