European Close Market Briefing – 23/08/2017 – by Arjun Lakhanpal

August 23, 2017 by

In European Equity Markets stocks fell on Wednesday, led lower by sharp declines in advertising giant WPP after it cut sales forecasts on weakening demand. The pan-European STOXX 600 index and euro zone blue-chips both fell 0.5 percent. WPP  shares lost 10.9 percent after the world’s largest advertising group cut its full-year sales outlook after a decrease in demand caused it to miss first-half targets. Potash miner K+S  was a bright spot, jumping more than 4 percent after a report in German business newsletter Platow Brief that hedge fund Elliott could be interested in the company. Fiat Chrysler ended up 5.8 percent at an all-time high on continued speculation about potential tie-ups.

In Currency Markets the dollar fell on Wednesday in a generally risk-averse market after U.S. President Donald Trump’s threat of a government shutdown and comments about the possible termination of a North American trade agreement. In mid-morning trading, the dollar fell 0.4 percent to 109.17 yen with the dollar index falling 0.3 percent to 93.272. The euro rose 0.4 percent to $1.1804 and hit a fresh 10-1/2-month peak against the British pound, near 92 pence. Sterling  fell 0.20 percent to $1.2797. The Australian and New Zealand dollars remained weaker, with Aussie down 0.21 percent at $0.7896 and with Kiwi retreating 0.88 percent to $0.7214.

In Commodities Markets  oil prices rose on Wednesday after U.S. crude inventories declined for the eighth straight week and a storm approached the Gulf Coast with the potential to disrupt oil and refined products output. Brent crude futures climbed 58 cents to $52.45 a barrel, while U.S. West Texas Intermediate crude futures were trading at $48.34, up 51 cents. U.S. crude inventories fell 3.3 million barrels last week, compared with analyst expectations for a decrease of 3.5 million barrels. Spot gold was up 0.3 percent to $1,287.83 an ounce, after shedding 0.5 percent in the previous session. Silver rose 0.2 percent to $17 an ounce, while platinum was up 0.4 percent to $975. Palladium lost 0.1 percent to $932.

In US Equity Markets  stocks were lower late on Wednesday morning after President Donald Trump’s warning of a government shutdown to secure funds to build the Mexico border wall added to nerves as the deadline to the raise the U.S. debt ceiling looms. The Dow was down 0.27 percent, at 21,841.11 and the S&P 500 was down 0.28 percent, at 2,445.68. The Nasdaq Composite was down 0.35 percent, at 6,275.56. Six of the 11 major S&P indexes were lower, with consumer discretionary index’s 0.75 percent fall leading the decliners. Lowe’s 5.5 percent fall weighed the most on the S&P after the company reported a lower-than-expected profit and cut its margins forecast. Bigger rival Home Depot fell 2.28 percent, weighing the most on the Dow.

In Bond Markets  U.S. Treasury yields fell on Wednesday as stocks weakened after U.S. President Donald Trump said late on Tuesday that he would be willing to risk a government shutdown to secure funding for a border wall, raising fears of a bruising budget battle. Benchmark 10-year notes were last up 9/32 in price to yield 2.19 percent, down from 2.22 percent on Tuesday. The yield on Germany’s 10-year bond, fell to 0.371 percent, down 3 basis points on the day.