European Close Market Briefing – 26/05/2017 – by Arjun Lakhanpal

In European Equity Markets stocks slid in thin trade on Friday as shares in energy firms and banks decreased, ending a lackluster week relatively little changed. The pan-European STOXX 600 index closed 0.2 percent lower as did the euro zone blue chips. Banks were the biggest drag, falling 0.6 percent and hitting a one-week low earlier in the session. In the sector, Italian banks Intesa Sanpaolo, Mediobanca and UniCredit reduced losses after earlier falls, while Germany’s Deutsche Bank, Bank of Ireland and Britain’s Lloyds were among the biggest fallers. A further decline in Petrofac took losses in the British oilfield services firm close to 38 percent over the past two sessions after several brokers more than halved their price targets on the stock.

In Currency Markets the dollar rose to a four-day high on Friday buoyed by upbeat U.S. economic growth data, which eased concerns of a slowdown in the U.S. economy, fuelling expectations the Federal Reserve would hike its benchmark rate in June. The pound fell sharply against the dollar to $1.2797, down 1.12 percent, with an opinion poll showing a narrowing in the Conservatives’ lead over Labour, raising uncertainty over the appeal of Theresa May’s leadership and the ruling party’s election manifesto. The euro fell to $1.1176, down 0.30 percent. Against the Japanese yen, the dollar fell to 111.35, down 0.43 percent. The dollar index rose by 0.23 percent to 97.36.

In Commodities Markets  oil prices rose more than 1 percent on Friday, a partial rebound from the previous day’s steep slide that came when an OPEC-led decision to extend production curbs did not go as far as some investors had hoped.  Global benchmark Brent futures rose 50 cents to $51.97 a barrel, after hitting a session low of $50.71. U.S. West Texas Intermediate crude futures traded at $49.58 a barrel, up 68 cents day on the day. Spot gold had gained 1 percent to $1,267.74 per ounce, the highest since May 1. Among other precious metals, spot platinum climbed 1.6 percent to $961.24, its highest in a month. Spot silver rose 1.4 percent to $17.36 and palladium rose 1 percent to $779.

In US Equity Markets  stocks were little changed in late morning trading on Friday, following six straight days of gains, as investors took a breather ahead of a three-day holiday weekend. The Dow Jones Industrial Average was down 0.06 percent, at 21,070.45 and the S&P 500 was down 0.01 percent, at 2,414.81. The Nasdaq Composite was up 0.06 percent, at 6,208.99. Shares of Costco Wholesale rose 1.9 percent after the warehouse club operator reported a strong profit. Ulta Beauty jumped 3.3 percent, the most on the S&P, after the company raised its full-year forecast. Deckers Outdoor Corp rose as much as 21 percent to a nine-month high after reporting a surprise quarterly profit.

In Bond Markets U.S. Treasury yields fell on Friday as investors bought bonds to rebalance their portfolios at month-end, overriding an upward revision to first-quarter gross domestic product and a smaller-than-forecast decrease in durable goods orders for April. The benchmark 10-year Treasury note’s yield was down less than 1 basis point at 2.248 percent on light trading volume. It traded in a tight seven-basis-point range this week.