American Round-Up – 08/03/2017 – by Arjun Lakhanpal

In European Equity Markets  shares rose on Wednesday, with results-driven gains from German sportswear company Adidas and British security company G4S partly offset by losses from EDF and Boskalis. The pan-European STOXX 600 index rose 0.1 percent, ending four straight days of losses. UK’s FTSE closed 0.1 percent lower after Britain’s budget statement delivered few surprises. Adidas rose 9.4 percent to a record high. It increased sales and profit growth targets, after posting a 12.5 percent increase in 2016 sales. Banks were in demand, up 1 percent, mirroring gains by their U.S. peers after a better-than-expected jobs report cemented expectations for a U.S. rate increase next week.

In Currency Markets the U.S. dollar rose on Wednesday, extending its recent uptrend, as the latest read on the labor market came in stronger than expected, further bolstering expectations that the Federal Reserve would raise interest rates at its meeting next week.  The US Dollar Index which measures the currency against a basket of six major rivals, was up 0.2 percent at 102.01, moving within a couple of percentage points from its highest level since 2002, which was hit earlier this year. The ADP report on private-sector employment blew past expectations in February, with 298,000 jobs added in the month,  the third-best showing of the current economic recovery.

In Commodities Markets oil prices fell more than 1 percent on Wednesday after the US Department of Energy reported a much larger increase than expected in domestic crude inventories, feeding concerns the supply glut could persist even as Organization of the Petroleum Exporting Countries (OPEC) seeks to prop up prices with output curbs. US crude inventories rose by 8.2-million barrels in the last week, quadruple analysts’ expectations for an increase of 2 million barrels, as refineries cut output and imports rose, data from Energy Information Administration showed. US gasoline futures, meanwhile did extended gains, rising as much as 1.5 percent after EIA data showed the biggest weekly drawdown in stockpiles since 2011.

In US Equity Markets the S&P 500 and the Dow Jones Industrial Average swung between losses and gains on early Wednesday after a strong private hiring report raised the odds of an interest rate hike next week, lifting bank stocks while dragging rate-sensitive sectors. The S&P 500 financial index was up 0.63 percent, led by big banks such as Citigroup, Bank of America and Wells Fargo. However, the impact was offset by a 1 percent decline in high-dividend paying utilities. Caterpillar  kept the Dow in the red, declining 1.2 percent after the New York Times said it reviewed a report commissioned by the U.S. government that accused the heavy equipment maker of carrying out tax and accounting fraud.

In Bond Markets U.S. Treasury yields jumped on Wednesday, with benchmark yields hitting their highest levels since December as a strong gain in U.S. private-sector jobs in February sealed expectations the Federal Reserve will raise interest rates next week. The robust employment report from payroll processor ADP accelerated selling in bonds as investors were also making room for $20 billion in 10-year government debt for sale later on Wednesday. The two-year Treasury yield, which is especially sensitive to traders’ views on Fed policy, rose to 1.378 percent, the highest since August 2009. It was last at 1.362 percent, up 3 basis points from late on Tuesday.