European Close Market Briefing – 20/11/2017 – by Arjun Lakhanpal

November 21, 2017 by

In European Equity Markets stocks rose on Monday as confidence over global economic activity and a retreating euro encouraged investors to brush off worries over the collapse of coalition government talks in Germany. Germany’s DAX  rose 0.5 percent. The broader pan-European STOXX 600 index added 0.7 percent. Volkswagen was up 4.2 percent after it raised its mid-term outlook, sustaining investor hopes that the carmaker can further its recovery despite shouldering billions in costs for its electric-car offensive. Elsewhere, Roche rallied 5.9 percent, in the best performance of the STOXX 600, after the Swiss-based drugmaker announced two trial wins.

In Currency Markets the U.S. dollar touched its highest against a basket of major currencies in nearly a week on Monday, as the euro weakened amid political risks linked to German Chancellor Angela Merkel’s failure to form a three-way coalition government. The dollar index rose to 94.039, its highest since Nov. 14. The greenback also climbed against the Japanese yen, rising to a session high of 112.40 yen in early North American trading. The euro fell to $1.1720 in overnight trading following news of the failure to form a coalition German government. It fell dramatically against the yen to 131.16 yen, its weakest since Sept. 15. Sterling rose 0.17 percent to $1.3236.

In Commodities Markets   oil prices fell on Monday, extending recent weakness ahead of an OPEC meeting next week, while a rally in the dollar negatively affected commodities across the board. Brent crude futures were down 84 cents at $61.86, while U.S. West Texas Intermediate crude futures fell 1.2 percent, to $55.85 a barrel. OPEC last week forecast demand for its own crude to rise by 460,000 barrels per day to 33.42 million bpd next year, in contrast with a forecast from the International Energy Agency for a decrease of 320,000 bpd to 32.38 million bpd.  Spot gold was down 0.4 percent at $1,288.49 an ounce. Silver was down 1.3 percent at $17.08 an ounce and platinum fell 1.4 percent to $937.2. Palladium gained 0.1 percent to $993.9 an ounce.

In US Equity Markets  technology stocks led Wall Street higher on Monday as investors eased off the pedal with earnings season dying down and the Thanksgiving holiday coming up. The Dow was up 0.37 percent, at 23,444.53. The S&P 500 was up 0.12 percent, at 2,581.98 and the Nasdaq Composite was up 0.11 percent, at 6,790.28. Tech stocks were led higher by a roughly 1 percent gain in Cisco and IBM. The sector also got a boost from a 1 percent gain in semiconductor stocks on the back of merger news. Health stocks fell, weighed down by a 2.5 percent decrease in Merck and 1.5 percent fall in Bristol-Myers after Roche announced a trial win for a competing cancer drug. Wal-Mart fell 1.3 percent after Goldman Sachs cut its rating on the stock to “neutral” from “buy”.

In Bond Markets U.S. Treasury yields inched higher on Monday as investors awaited minutes on Wednesday from the Fed’s last meeting, with no major economic releases due this week and trading expected to be subdued before the Thanksgiving holiday on Thursday. Benchmark 10-year notes were last down 2/32 in price to yield 2.36 percent, up from 2.35 percent on Friday. The yield curve between two-year and 10-year notes also continued to flatten to 61 basis points, the flattest level since late 2007.