European Close Market Briefing – 28/06/2017 – by Arjun Lakhanpal

In European Equity Markets stocks  ended flat on Wednesday as a third day of gains for banking stocks in a session dominated by bets about future central bank action offset a tech sell-off. The STOXX 600 ended flat as further gains among financials, which benefit from tighter monetary policy. Europe’s broader banking index rose 1.3 percent, leading sectoral gainers in the region. Top gainer was Italy’s UniCredit, up 4.1 percent, followed by Bankia , which rose 4 percent, helped by a price target upgrade at Berenberg one day after the Spanish lender bought smaller peer BMN in a $924 million deal. German utilities RWE and E.ON were among the worst performers, down 2.4 and 1.3 percent respectively.

In Currency Markets the U.S. dollar touched its lowest level against the euro in a year on Wednesday after hawkish comments from the head of the Bank of England fuelled bets on tighter monetary policy in Europe, while Tuesday’s delay to a U.S. healthcare vote also hurt the greenback. The euro rose as much as 0.5 percent against the dollar to a one-year high of $1.1390 after jumping 1.4 percent Tuesday. The dollar was last down 0.2 percent against the yen at 112.12 yen after hitting a more than one-month high of 112.46 on Tuesday. The dollar index, which measures the greenback against a basket of six major rivals, fell as much as 0.4 percent to hit a more than seven-month low of 95.967.

In Commodities Markets oil futures climbed on Wednesday to their highest in more than a week despite a surprise build in crude inventories, as buyers were encouraged by a small weekly decrease in U.S. production. The U.S. Energy Information Administration said crude stocks rose by 118,000 barrels during the week ended June 23, while weekly production declined by 100,000 barrels per day to 9.3 bpd. Brent futures were up 1.2 percent at $47.20 a barrel . U.S. West Texas Intermediate crude was up 1 percent, at $44.68 per barrel.  Spot gold was up 0.2 percent at $1,249.81 an ounce and spot silver was up 0.4 percent at $16.72 an ounce. Platinum was 0.3 percent higher at $919.25, and palladium was down 0.2 percent at $856.

In US Equity Markets stocks were higher in late morning trading on Wednesday as financial and consumer stocks led a broad rally among the major sectors. The Dow Jones Industrial Average was up 0.59 percent, at 21,437.23, the S&P 500 was up 0.75 percent, at 2,437.64. The Nasdaq Composite was up 0.89 percent, at 6,201.38. The financial index’s 1.16 percent rise led the gainers, with Bank of America, JPMorgan and Citigroup all up more than 1 percent. The consumer discretionary index rose 0.9 percent, helped by a gain in Walt Disney, Comcast and Amazon. KB Home was up 3.2 percent after the homebuilder increased its full-year forecast. General Mills rose 2.3 percent after the Cheerios maker’s quarterly profit beat estimates.

In Bond Markets U.S. Treasury prices weakened on Wednesday, but came off their lows on reports that markets had misinterpreted comments by European Central Bank President Mario Draghi on Tuesday as being more hawkish than he had intended. Benchmark 10-year notes were last down 4/32 in price to yield 2.212 percent, up from 2.20 percent late on Wednesday. The yield curve between five-year notes and 30-year bonds steepened after falling to 91.9 basis points overnight, the lowest since late 2007.