European Close Market Briefing – 25/08/2017 – by Arjun Lakhanpal

August 25, 2017 by

In European Equity Markets stocks finished Friday’s session by swinging into the red, pulling back as U.S. Federal Reserve Chairwoman Janet Yellen gave nothing away about the path forward for monetary policy in the world’s largest economy. The Stoxx Europe 600 index wrapped up a choppy session by losing 0.1 percent to 374.07.  Shares of Provident Financial PLC rallied 22 percent, adding to double-digit percentage gains from Thursday and Wednesday. Shares of Aviva PLC swung lower, closing down by 0.3 percent. The insurer had said it is selling its 50 percent stake in its Italian joint venture to its partner Banco BPM for an undisclosed sum.

In Currency Markets the dollar fell against a basket of global currencies on Friday amid a decrease in investor expectations of a third rate hike later this year, after Federal Reserve chair Janet Yellen avoided talking about monetary policy in a speech at Jackson Hole. The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.63 percent to 92.64. The euro rose 0.68 percent to $1.1880 while the pound recouped some of its recent losses, rising 0.66 percent to $1.2885. Against the Japanese yen, the dollar fell 0.34 percent Y109.20.

In Commodities Markets oil prices rose on Friday as the dollar fell and as U.S. petroleum industry braced for Hurricane Harvey, which could become the biggest storm to hit the U.S. mainland in more than a decade. U.S. crude futures were up 0.7 percent, at $47.74 a barrel, having hit a session high of $47.91. Brent crude was 30 cents higher at $52.34 after touching a high of $52.68. U.S. crude’s discount to Brent widened to its biggest in two years.  Spot gold was barely changed at $1,287 per ounce. Silver edged up 0.2 percent to $17 an ounce, while platinum was down 0.3 percent to $976 ounce. Palladium was up 0.3 percent at $937.30 per ounce, after earlier touching its highest in 16 years at $940.50.

In US Equity Markets stocks were higher in late morning trading on Friday as investors perceived Federal Reserve Chair Janet Yellen’s remarks as dovish and on news that President Donald Trump will turn his attention to long-awaited tax reform next week. The Dow Jones Industrial Average was up 0.3 percent, at 21,849 and the S&P 500 was up 0.34 percent, at 2,447.27. The Nasdaq Composite was up 0.14 percent, at 6,280.42. The telecom, industrials, and energy sectors were the leaders, with gains of more than 0.5 percent. Oil majors Exxon and Chevron rose about 1 percent, helped by a rise in oil prices as the industry braces for Hurricane Harvey, which may become the biggest storm to hit the U.S. mainland in more than a decade.

In Bond Markets U.S. Treasury yields fell slightly on Friday after Federal Reserve Chair Janet Yellen did not mention monetary policy in a highly anticipated speech, relieving some investors who thought she might make hawkish comments on the economy. At a conference in Jackson Hole, Wyoming, Yellen said that reforms put in place after the 2007-2009 financial crisis have strengthened the financial system without impeding economic growth, and any future changes should remain modest. Benchmark 10-year notes gained 5/32 in price to yield 2.176 percent, down from 2.194 percent on Thursday.