European Close Market Briefing – 09/10/2017 – by Arjun Lakhanpal

In European Equity Markets stocks rose on Monday, with Germany’s DAX touching a new record high and Spain’s IBEX its highest for a week, as political risk concerns over Catalonia eased a day after a demonstration in Barcelona against independence. Following four consecutive weeks of gains, the pan-European STOXX 600 rose 0.2 percent while the DAX rose 0.2 percent at an all-time closing peak. The IBEX rebounded 0.5 percent with Caixabank gaining 1.4 percent after its board agreed to move its registered office to Valencia. Credit Agricole fell 1.2 percent after its CEO indicated it would join the line of potential suitors for Commerzbank  should the German government want to sell its 15 percent stake. Commerzbank rose 0.4 percent.

In Currency Markets the dollar steadied close to its highest level in ten weeks on Monday, with strong U.S. wages data at the end of last week giving investors confidence that the Federal Reserve will hike interest rates in December. The euro edged up 0.1 percent to $1.1745, up from Friday’s low of $1.1669 – its weakest level since Aug. 17. The dollar index – which measures the greenback against a basket of six other major currencies – hit its highest since late July on the numbers, at 94.267. It traded close to that level on Monday, inching down 0.1 percent to 93.701. The New Zealand dollar touched a four-month low after a final vote count in the country’s tight general election released over the weekend failed to identify a clear winner.

In Commodities Markets  oil prices stabilized on Monday after one of the most bearish weeks in months, propped up by OPEC comments signaling the possibility of continued action to restore market balance in the long term. Global benchmark Brent crude was down 2 cents at $55.60 a barrel. U.S. West Texas Intermediate crude futures were trading at $49.46, up 17 cents.  Spot gold was up 0.4 percent at $1,280.25 an ounce, while U.S. gold futures for December delivery were up $7.70 an ounce at $1,282.60. Among other metals, silver was up 0.8 percent at $16.91 an ounce, while platinum was down 0.3 percent at $909.75 an ounce and palladium was 0.5 percent higher at $924.25.

In US Equity Markets stocks were little changed in late morning trading on Monday, as losses in healthcare stocks were offset by gains in technology shares, with the third-quarter earnings season looming. The Dow was up 0.02 percent, at 22,778.8, and the Nasdaq Composite was up 0.08 points at 6,590.26. The S&P 500 was down 0.07 percent, at 2,547.57. Eight of the 11 major S&P indexes were higher, led by a 0.31 percent gain in the technology sector. The healthcare index was down 0.56 percent. GE shares fell 3 percent after the conglomerate named a new CFO said it gave activist investment firm Trian Fund Management a board seat. Tesla fell 2.51 percent after pushing back the unveiling of the big rig truck to mid-November.

In Bond Markets  Spanish borrowing costs fell to a one-week low on Monday, narrowing the gap over top-rated Germany on hopes that Catalonia would this week take a step back from a unilateral declaration of independence from Spain. Spain’s 10-year bond yield fell as much as 8 basis points to a 1-week low of 1.64 percent, before edging back up slightly to 1.68 percent.The gap between Spain and Germany’s 10-year bond yield shrank to around 118 basis points – having stretched out to 136 bps last week at the height of worries about a conflict between Catalonia and the central government in Madrid. The U.S. bond market was closed for the Columbus Day holiday.