European Close Market Briefing – 19/05/2017 – by Arjun Lakhanpal

May 21, 2017 by

In European Equity Markets stocks finished Friday’s session higher, modestly recovering from a selloff spurred by U.S. political drama that dragged major regional benchmarks into the red for the week. The Stoxx Europe 600 index  rose 0.6 percent to close at 391.51. Germany’s DAX 30 rose 0.4 percent to end at 12,638.69, and France’s CAC 40 picked up 0.7 percent to end at 5,324.40. The FTSE 100 rose 0.5 percent to 7,470.71, and Spain’s IBEX 35 climbed 1.4 percent to 10,835.40.  Banco Popular Español SA shares rose 9.9 percent after Spanish newspaper El Confidencial reported Banco Santander SA was preparing to bid for its beleaguered rival.

In Currency Markets the U.S. dollar was poised on Friday for its worst week since April 2016 against a basket of major currencies, having given up much of the gains made since Donald Trump was elected U.S. president.  Against the safe-haven Swiss franc, the dollar fell 0.45 percent, touching a fresh 6-month low. It was on track for its largest weekly percentage fall since February 2016. The dollar edged up against the yen to 111.57 but remained on track for its first weekly fall in five. The euro rose 0.8 percent on Friday to hit a six-month high of $1.1196. The dollar fell 2.5 percent against the Brazilian real. The dollar index fell 0.6 percent, hitting its lowest since Nov. 9, the day of the U.S. election results.

In Commodities Markets oil prices rose more than a dollar a barrel on Friday, heading for a second week of gains on growing expectations that leading oil producers will agree at next week’s OPEC-led meeting to extend output cuts aimed at reducing a global crude glut. Brent crude was up $1.18 at $53.29, while U.S. benchmark crude oil was up $1.13 at $50.48. Both benchmarks were at their highest in about a month, rising more than 2 percent. Spot gold was up 0.5 percent at $1,253.31 per ounce, putting it up 1.9 percent for the week. Among other precious metals, palladium gained 0.3 pct to $765.85 per ounce. Platinum rose 0.6 pct to $937.13 an ounce while silver climbed 1.5 pct to $16.78 an ounce.

In US Equity Markets  stocks were higher late Friday morning as a set of strong corporate earnings lifted investor spirits in a week dominated by uncertainty surrounding Donald Trump’s presidency. The Dow Jones Industrial Average was up 0.59 percent, at 20,785.41, the S&P 500 was up 0.74 percent, at 2,383.22 and the Nasdaq Composite was up 0.72 percent, at 6,098.70. Wal-Mart was up 1.7 percent after BMO upgraded the big-box retailer’s stock to “market perform” from “underperform” following higher-than-expected quarterly sales at established U.S. stores.  Deere hit an all-time high of $122.24 after the farm and construction equipment maker reported a quarterly profit that beat expectations.

In Bond Markets U.S. Treasury yields rose slightly on Friday but stayed near one-month lows as investors considered whether allegations against U.S. President Donald Trump would disrupt efforts to cut taxes and increase spending. Benchmark 10-year notes were last down 3/32 in price to yield 2.24 percent, up from 2.23 percent late on Thursday. The yields had fallen to 2.18 percent on Thursday, their lowest since April 19.