European Close Market Briefing – 21/07/2017 – by Arjun Lakhanpal

July 21, 2017 by

In European Equity Markets stocks declined to the lowest level in 10 days as concern about potential antitrust collusion sent carmakers toward the worst decline in more than a year. Also a strong euro weighed as well.  The Stoxx Europe 600 Index slid 1 percent at the close, as a strong euro also weighed on exporters. Carmakers fell the most in six months in the biggest retreat among industry sectors. Vodafone Group shares rallied as much as 2.5 percent after the world’s second largest mobile operator reported better-than-expected revenue growth in its first quarter, thanks to a robust commercial momentum in Europe and accelerating growth in AMAP region.

In Currency Markets the U.S. dollar hit its lowest level in more than a year against a basket of major rivals on Friday a day after the European Central Bank’s chief abstained from talking down the euro, while obstacles to U.S. President Donald Trump’s policy agenda also weighed. The dollar index touched 93.952, its lowest level since June of last year, and was last down 0.3 percent at 94.032. The euro touched $1.1677, its highest level against the dollar in nearly two years, and was last up 0.2 percent on the day at $1.1653. The dollar also touched its lowest against the Swiss franc in more than a year at 0.9468 franc. The euro was last on track to gain 1.6 percent for the week, which would mark its second straight weekly rise against the dollar.

In Commodities Markets oil prices fell about 2 percent on Friday after a consultant forecast a rise in OPEC production for July despite the group’s pledge to curb output, reigniting concerns the global market will stay awash with crude. Petro-Logistics, which tracks OPEC supply forecasts, said OPEC crude production would rise by 145,000 barrels per day (bpd) this month, taking the group’s combined output above 33 million bpd. Higher supply from Saudi Arabia, the United Arab Emirates (UAE) and Nigeria would drive this month’s gains, it said.  Benchmark Brent crude futures were down 92 cents or about 1.9 percent at $48.38 a barrel, while U.S. West Texas Intermediate (WTI) crude futures traded at $45.99 a barrel, down 93 cents or 1.98 percent.

In US Equity Markets stock indexes opened lower on Friday, as industrial heavyweight General Electric’s tepid results weighed on investor sentiment. Shares of GE fell as much as 5.4 percent to their lowest level since Oct 2015, despite the results beating estimates, as the company reported a nearly 60 percent decline in profit. The stock was the biggest drag on the Dow and the S&P 500. The S&P 500 was down 0.24 percent, at 2,467.37. The Nasdaq Composite was down 0.23 percent, at 6,375.08. Nine of the 11 major S&P sectors were lower, with the industrials index’s 0.81 percent fall leading the decliners. Schlumberger, the world’s largest oilfield services provider, was up 1.5 percent after it reported better-than-expected quarterly profit and revenue.

In Bond Markets  Euro zone bond yields fell across the board on Friday after the single currency hit a two-year high against the dollar, leading investors to question the timing of the European Central Bank’s planned withdrawal of stimulus.  Germany’s 10-year government bond yield, the benchmark for the region, fell 3.5 basis points to a one-week low of 0.50 percent . Italian, Portuguese and Spanish bonds – seen as the biggest beneficiaries of the ECB’s largesse – saw their yields fall 4-10 basis points.