European Close Market Briefing – 30/05/2017 – by Arjun Lakhanpal

In European Equity Markets stocks fell almost across the board on Tuesday, with banks leading the charge lower after a broker downgrade and concerns over a potential early election in Italy. Renewed concerns that Greece may not make its next debt repayment also weighed on investor sentiment in Europe. The Stoxx Europe 600 index lost 0.2 percent to close at 390.50, marking a fourth straight session of losses. The Stoxx Europe 600 Banks Index lost 1 percent,  making banks the worst performing group on Tuesday. The weakness came after Deutsche Bank lowered banks to underweight from a benchmark rating, saying a slowdown in eurozone growth is likely to weigh on the sector in coming months.

In Currency Markets the dollar fell against most currencies on Tuesday, weighed by a decrease in U.S. Treasury yields amid a cautious global sentiment with political worries in Europe and weaker stock and commodity markets after a long U.S. holiday weekend. Against the safe-haven yen, the dollar fell 0.3 percent to 110.95 yen, while sliding 0.4 percent versus the Swiss franc to 0.9743 franc. In mid-morning trading, the dollar index was down 0.2 percent at 97.29, with the euro up 0.2 percent at $1.1186. Consumer spending, accounting for more than two-thirds of U.S. economic activity, increased 0.4 percent last month. The so-called core personal consumption expenditure price index also bounced back 0.2 percent after falling 0.1 percent in March.

In Commodities Markets oil prices fell more than 1 percent on Tuesday amid signs of a resurgence in Libya’s output and on concerns that extended production cuts by the world’s top exporters may not be enough to drain a global glut that has depressed prices for almost three years. Brent crude fell 1.7 percent, to $51.42 a barrel, while U.S. light crude was 1.2 percent, lower at $49.21. Spot gold touched a one-month high of $1,270.47 before pulling back 0.3 percent to $1,262.60 per ounce. Among other precious metals, silver was last flat at at $17.35. Palladium was flat at $797.22 after breaching $800 an ounce on Monday. Platinum was down 1.2 percent at $941.24 an ounce.

In US Equity Markets  stocks were slightly lower in late morning trading after a three-day holiday weekend, weighed down by a fall in energy and financial stocks. The Dow Jones Industrial Average was down 0.17 percent, at 21,044.6, while the S&P 500 was down 0.10 percent, at 2,413.26. The Nasdaq Composite was down 0.01 percent, at 6,209.80. The energy sector’s 1.04 percent fall led the decliners among the major S&P 500 sectors. Oil majors Chevron and Exxon were down about 0.5 percent.  Amazon was up 0.3 percent, after briefly crossing the $1,000 mark. CardConnect’s shares jumped 10 percent after First Data agreed to buy the payment processor for $750 million. First Data was up 1 percent.

In Bond Markets U.S. benchmark and long-dated Treasury yields fell to their lowest levels in more than a week on Tuesday on month-end buying and after U.S. inflation data reinforced doubts that the Federal Reserve would raise interest rates more than one more time in 2017. Benchmark 10-year U.S. Treasury yields touched 2.224 percent, their lowest in 11 days, while 30-year yields touched 2.885 percent to mark their lowest in 12 days.