European Close Market Briefing – 10/07/2017 – by Arjun Lakhanpal

In European Equity Markets stocks closed higher on Monday, underpinned by financials and basic resources, as mergers and acquisitions rumbled on with some broker notes also prompting individual stock moves. The pan-European STOXX 600 was up 0.4 percent at its close, rising in concert with euro zone stocks and blue-chips. Strong gains in banks led by Bank of Ireland boosted the benchmarks, while basic resources reversed course to trade higher as metals prices firmed. German utility E.ON rose 2.2 percent, a top-performer in the buoyant utilities sector after HSBC said recent weakness offered an “excellent buying opportunity”, raising the stock to a ‘buy’ from ‘reduce’.

In Currency Markets the dollar climbed to a two-month high against the yen on Monday as the Bank of Japan’s offer last week to buy an unlimited amount of bonds, and an unexpected decrease in Japanese May machinery orders, pressured the Japanese currency. The greenback was up 0.19 percent to 114.1 yen, after hitting 114.29 yen, its highest since May 11, earlier in the session. The dollar index, which tracks the greenback against six major rivals, was up 0.14 percent at 96.143. Meanwhile, the Canadian dollar was little changed against its U.S. counterpart while investors awaited a Bank of Canada interest rate decision on Wednesday.

In Commodities Markets oil prices rose modestly on Monday, but rising drilling activity in the United States and uncertainty over Libyan and Nigerian production cuts clouded the future supply outlook. U.S. crude futures were up 0.7 percent at $44.51 a barrel, while Brent crude futures rose 0.6 percent to $47 a barrel. The OPEC agreed with some non-OPEC members to curtail production until March 2018, but the move has failed to eliminate a global glut of crude. U.S. energy firms added seven oil drilling rigs last week, marking a 24th week of increases out of the last 25 and bringing the count to 763, the most since April 2015, energy services company Baker Hughes said.

In US Equity Markets  stocks were slightly up on Monday as gains in technology stocks helped outweigh losses in healthcare. The Dow was up 0.03 percent, at 21,420.76, the S&P 500 was up 0.114218 percent, at 2,427.95 and the Nasdaq Composite was up 0.18 percent, at 6,164.40. Five of the 11 major S&P sectors were higher, led by 0.65 percent rise in technology index. The healthcare index was down 0.21 percent, weighed down by Johnson & Johnson and Medtronic.  United Health was down 0.23 percent after the President Trump’s plan to replace Obamacare continued to face obstacles. Abercrombie & Fitch shares were down 20.6 percent after the teen apparel retailer terminated discussion on a potential deal following a review.

In Bond Markets  U.S. Treasury yields fell on Monday after rising for more than a week, in line with weakness in European markets, as investors consolidated positions following a strong U.S. non-farm payrolls report that kept the Federal Reserve on track to raise interest rates at least once more this year. Benchmark 10-year Treasury yields fell to 2.374 percent, from 2.393 percent last Friday. U.S. 30-year yields slid to 2.927 percent, from 2.935 percent last Friday. The yield on Germany’s 10-year government bond was headed for its biggest one-day fall in almost four weeks, down 4 basis points at 0.54 percent.