European Close Market Briefing – 29/06/2017 – by Arjun Lakhanpal

In European Equity Markets robust bank and mining stocks helped Britain’s FTSE 100 index outpace European peers on Thursday, caught up in a broad slide driven by concerns over central banks potentially tightening policy. Britain’s main share index ended 0.5 percent lower, having spent much of the session in positive territory. The STOXX 600 index was down 1.2 percent to a 2-month low. Euro zone blue chips fell 1.5 percent. HSBC was up more than 4 percent to a near four-year high, also boosted by a Morgan Stanley upgrade to ‘overweight’. Miners Rio Tinto, Glencore, Antofagasta and Anglo American also lent support as copper and gold prices climbed against the weaker dollar.

In Currency Markets the U.S. dollar held around a nearly 14-month low against the euro on Thursday on growing expectations of more hawkish monetary policies in Europe and Canada and on skepticism of another Fed interest rate increase this year. The euro rose to $1.1434, its highest since May 11, 2016, with European Central Bank sources’ attempt on Wednesday to moderate the message from Tuesday’s speech by President Mario Draghi falling largely on deaf ears. The greenback touched a roughly five-month low of C$1.2987 against the Canadian dollar and last traded down 0.3 percent at $1.2994. The dollar hit a more than one-month high of 112.92 yen before easing from that level to trade up just 0.1 percent against the Japanese currency at 112.37.

In Commodities Markets  oil futures edged up less than 1 percent after hitting a two-week high on Thursday, extending a rally into a sixth straight session after a decline in weekly U.S. crude production temporarily alleviated concerns about deepening oversupply.  Brent crude futures were 0.6 percent, higher at $47.61 a barrel, having touched a two-week high of $48.03 earlier in the session. U.S. crude also hit a two-week peak at $45.45 and was last up 0.7 percent, at $45.09 a barrel. Gold fell as central bank comments lifted bond yields. Spot gold lost 0.4 percent to $1,243.55 an ounce. U.S. gold futures fell 0.41 percent to $1,244.00 an ounce. Copper rose 0.93 percent to $5,935.50 a ton.

In US Equity Markets stocks fell in late morning trading on Thursday as a selloff in technology stocks outweighed gains in the financial sector. The Dow Jones Industrial Average was down 0.15 percent, at 21,422.44, the S&P 500  was down 0.29 percent, at 2,433.39. The Nasdaq Composite was down 0.88 percent, at 6,179.65. The S&P tech index led the laggards among the 11 sectors, with the index on track to post its biggest monthly loss in a year. However, the financial sector, which rose 1.29 percent, limited the slide. Shares of the top six U.S. banks rose after the Federal Reserve cleared them in the second part of its annual stress test, allowing them to raise dividend payouts and share buybacks.

In Bond Markets  benchmark U.S. Treasury yields rose to five-week highs in sympathy with higher European government debt yields, as investors evaluated the likelihood of less accommodative policy. Treasury 10-year notes last fell 12/32 in price to yield 2.2648 percent, from 2.223 percent late on Wednesday.  Germany’s 10-year government bond yield rose to a seven-week high, dragging Treasury yields higher with it.