European Close Market Briefing – 21/11/2017 – by Arjun Lakhanpal

November 22, 2017 by

In European Equity Markets stocks opened lower on Tuesday but quickly recovered as continued faith in the underlying strength of the European economy and a synchronized global expansion overcame negative trading updates, notably in Britain.  The STOXX 600 benchmark was up 0.1 percent with most European bourses and sectors in positive territory. Germany’s DAX was up 0.1 percent after Chancellor Angela Merkel said she would prefer a new election to minority rule after the failure of talks to form a three-way coalition. EasyJet was the top performer with a 5.1 percent gain after it said it was benefiting from the collapse of rivals and from problems at Ryanair.

In Currency Markets the dollar turned broadly lower on Tuesday, moving in line with declining U.S. 10-year Treasury yields and consolidating gains from Monday in light trading ahead of Thursday’s Thanksgiving holiday in the United States.  The single currency was flat at $1.1735 after falling half a percent on Monday, its biggest daily fall since Oct. 26. The dollar fell 0.25 percent against the yen to 112.34 yen and 0.2 percent against the Swiss franc to 0.9916 franc, but remained within its trading range from the previous session against both currencies. The dollar index, which tracks the greenback against a basket of six major rivals, fell 0.1 percent to 93.971, but was still within sight of its overnight peak of 94.104, its highest since Nov. 14.

In Commodities Markets  oil rose on Tuesday, supported by expectations of an extension next week to OPEC output cuts, but prices remained under pressure from signs of higher output in the United States. Brent crude oil was up 17 cents at $62.39 a barrel. U.S. light crude was at $56.72, up 30 cents.  OPEC, together with a number of non-OPEC producers led by Russia, has been restraining output this year in an effort to end a global supply overhang and prop up prices. At its meeting next week, the group is widely expected to extend the deal beyond its March 2018 expiry date. Spot gold was up 0.5 percent at $1,283.03 per ounce. Silver climbed 0.6 percent to $17 an ounce and platinum was up 0.7 percent at $931.60. Palladium  gained 0.3 percent to $991.60 an ounce.

In US Equity Markets the main indexes hit record levels on Tuesday, with technology stocks rising for a second straight day and healthcare shares getting a boost from Medtronic’s results. The Dow Jones Industrial Average was up 0.7 percent, at 23,595.36. The S&P 500 was up 0.66 percent, at 2,599.27 and the Nasdaq Composite was up 0.95 percent, at 6,855.41. Medtronic rose 5.3 percent after the medical device maker reported better-than-expected results and backed its forecast.  Lowe’s fell marginally even as the home improvement chain reported strong sales and profit on higher demand after recent hurricanes. Signet Jewelers tanked 27 percent after reporting a surprise quarterly loss, pulling down Tiffany by more than 1 percent.

In Bond Markets the U.S. Treasury yield curve flattened to its lowest in a decade on Tuesday as investors awaited minutes from the Federal Reserve’s last meeting, with no major economic releases due this week and trading subdued before the U.S. Thanksgiving holiday. Benchmark 10-year notes were last up 4/32 in price to yield 2.36 percent, down from 2.37 percent on Monday. The yield curve between two-year and 10-year notes flattened to 59 basis points, the lowest since late 2007.