European Close Market Briefing – 26/06/2017 – by Arjun Lakhanpal

June 26, 2017 by

In European Equity Markets stocks rose on Monday as banks rallied after Italy reached a deal to wind up two failed regional banks and Nestle climbed to a new record after an activist investor urged changes at the consumer bellwether. Gains in bank stocks helped the pan-European STOXX 600 and the euro zone blue chip indexes rise 0.6 and 0.7 percent respectively, while UK’s FTSE added 0.6 percent. Shares in Intesa, Italy’s largest retail bank, rose 3.2 percent while the euro zone bank index rose 1.3 percent. Nestle led STOXX gainers, up 4.3 percent. Activist investor Daniel Loeb’s Third Point unveiled a stake of more than 1 percent, urging the group to improve its margins, buy back stock and sell its stake in L’Oreal.

In Currency Markets the U.S. dollar hit a more than one-week low against the euro on Monday after weaker-than-expected economic data fueled doubts about the Federal Reserve’s interest rate hike timeline, while caution ahead of speeches from central bank officials limited the move. The yen fell 0.4 percent to 111.69 per dollar while sterling, on the up since more Bank of England policymakers have either called or said they are likely to call for higher interest rates, rose 0.3 percent to $1.2733. The euro rose against the dollar to $1.1219, its highest since June 15, and was last up 0.2 percent at $1.1214. The dollar index was only down 0.1 percent at 97.165.

In Commodities Markets oil prices rebounded on Monday after last week’s seven-month lows, but were hemmed in by a relentless rise in U.S. supply and a rise in demand for short sale contracts that signal investors see potential for a price fall. Brent crude futures were up 0.6 percent, at $45.79 a barrel, still set for a near 20 percent decline in the first half of the year. U.S. crude futures were up 0.8 percent, at $43.36 a barrel. Spot gold was down 0.9 percent at $1,245.40 an ounce. U.S. gold futures slid by 1.1 percent to $1,242.30. Elsewhere, silver fell 0.5 percent to $16.65 an ounce and platinum fell by 1 percent to $917.50. Palladium edged up 0.3 percent to $854.90 after registering its biggest intraday percentage decline since Jan.

In US Equity Markets  stocks pared gains in late morning trading on Monday, as a recovery in technology stocks and oil prices stalled. The Dow Jones Industrial Average was up 0.01 percent, at 21,396.61, the S&P 500  was up 0.04 percent, at 2,439.36. The Nasdaq Composite was down 0.29 percent, at 6,246.85. The S&P energy fell 0.37 percent and was the biggest laggard among the major S&P sectors. The financial index rose 0.59 percent after a string of Federal Reserve policymakers appeared to back another rate hike this year despite a patch of recent weak economic data. Micron was up 1.7 percent after Cowen & Co increased its price target on the chipmaker’s stock.

In Bond Markets U.S. Treasury prices gained on Monday after data showed that new orders for U.S. capital goods fell unexpected in May, suggesting a loss of momentum in the manufacturing sector halfway through the second quarter. Benchmark 10-year notes were last up 2/32 in price to yield 2.137 percent, down from 2.144 percent late on Friday. Thirty-year bond yields fell to 2.70 percent, the lowest since Nov. 9. Italian 10-year government bond yields fell 4 basis points to 1.88 percent, narrowing the gap over benchmark German equivalents to 164 bps. Greece’s 10-year yields fell to their lowest since 2009 after Moody’s upgraded its credit rating on Friday.