European Close Market Briefing – 08/05/2017 – by Arjun Lakhanpal

In European Equity Markets stocks powered ahead on Thursday as earnings, economic data and politics aligned to boost the market to further highs. The pan-European STOXX 600 index rose 0.7 percent, while German blue chips rose to an all-time high and France’s CAC climbed to its highest in more than nine years. European banks rose 1.5 percent after lender HSBC jumped 2.9 percent, having posted a better-than-expected first-quarter profit and capital position.  British retailer Next was under pressure, down 5.1 percent after cutting the top end of its full-year profit guidance. European mining firms fell 2.3 percent as copper, aluminium and gold prices sagged, weighing on shares of aluminium producer Norsk Hydro, Centamin and Anglo American.

In Currency Markets the euro fell from six-month highs against the dollar on Monday, after Emmanuel Macron’s widely expected victory in France’s presidential election, as investors took profit on a roughly three percent gain for the currency since he won the first round two weeks ago. The euro fell 0.5 percent to $1.0944 against the dollar, and 0.4 percent versus the yen to 123.45 yen. The dollar traded at 112.98 yen, up 0.23 percent. Sterling lost 0.32 percent to $1.2931, as Macron’s victory raised concerns over Theresa May’s Brexit agenda, as the newly elected French President vowed to be “tough” on Britain earlier this year, following the UK’s decision to leave the EU.

In Commodities Markets oil rose on Monday, reversing earlier losses, after sources said OPEC and its partners were considering extending their existing supply deal possibly into next year, which helped offset the bearish impact of more increases in U.S. crude output. Brent crude was up 34 cents at $49.44 a barrel, having recovered from a session low of $48.65. U.S. light crude was up 35 cents at $46.57 a barrel, up from an intraday low of $45.83. Spot gold was up 0.2 percent to $1,230 per ounce after touching 1,224.86 earlier, its lowest since March 17. Spot silver fell 0.2 percent to $16.30 an ounce. Platinum was 0.2 percent higher at $938.85 an ounce and palladium was 0.2 percent higher at $812.

In US Equity Markets  the S&P 500 and the Nasdaq lost ground on Monday after touching record highs as investors looked for fresh catalysts following centrist Emmanuel Macron’s widely expected victory in the French presidential election. The Dow Jones Industrial Average was down 0.02 percent, at 21,002.33. The S&P 500 was down 0.11 percent, at 2,396.5 and the Nasdaq Composite was down 0.14 percent, at 6,092.36. Shares of Kate Spade rose 8.2 percent after bigger rival Coach Inc said it would buy the company for $2.4 billion. Coach shares rose 5.2 percent. Tyson Foods was down nearly 6 percent after the meat processor reported a decline in quarterly profit.

In Bond Markets U.S. Treasury yields were little changed early Monday, trimming their earlier fall, following comments from St. Louis Federal Reserve President James Bullard who said strong bond demand and low labor force growth would keep a lid on interest rates. The yield on benchmark U.S. 10-year Treasury notes was 2.352 percent, flat from late on Friday, after declining earlier Monday in the wake of Emmanuel Macron’s expected win of the French presidential runoff on Sunday. The gap between French and German 10-year borrowing costs fell to 33 basis points at one stage, a six-month low.