European Close Market Briefing – 12/07/2017 – by Arjun Lakhanpal

In European Equity Markets a run higher for energy stocks and miners, as well as strong updates from retailers Burberry and B&M helped drive European shares higher in on Wednesday, though renewed pain for publisher Pearson weighed on the media sector. The pan-European STOXX 600 index was up 0.5 percent, as were the blue chips. Luxury goods group Burberry was a strong gainer, rising around 2.8 percent after reporting 3 percent underlying revenue growth in the first quarter, helped by robust demand in mainland China and continuing good performance in its British market. The cyclical autos sector was led by a 2.2 percent rise in Valeo shares, which gained after the car parts maker said that it was eyeing a sale of a unit to Raicam.

In Currency Markets the dollar rose against a basket of major currencies on Wednesday after the release of prepared remarks from Federal Reserve Chair Janet Yellen that said the U.S. economy is healthy enough to absorb further gradual rate increases and the slow wind-down of the Fed’s bond portfolio. The dollar index, which tracks the greenback against six major rivals, was up 0.09 percent to 95.753, after briefly falling to 95.511, its lowest since June 30. The loonie strengthened to $1.2812, its strongest against the U.S. dollar since August 2016. Sterling was up 0.33 percent to $1.2887. The euro was down 0.42 percent to $1.1417. The Japanese yen strengthened 0.64 percent to trade at 113.20 per dollar.

In Commodities Markets oil futures rose more than 1 percent on Wednesday, but backed off session highs despite hefty drawdowns in U.S. crude and gasoline inventories as government data also showed stocks were still above average and demand lackluster. U.S. crude inventories fell 7.6 million barrels last week, its biggest weekly decrease in 10 months, the U.S. Energy Information Administration said. Brent crude futures were up 0.9 percent, at $47.96 a barrel, while U.S. West Texas Intermediate crude was up 1.4 percent, at $45.67 per barrel. U.S. gasoline stocks fell 1.6 million barrels, compared with analysts’ expectations for a 1.1 million-barrel gain. Spot gold was up 0.23 percent at $1,220.11 an ounce.

In US Equity Markets stocks were higher in late morning trading on Wednesday, with the Dow hitting a record, after Federal Reserve Chair Janet Yellen said interest rates hikes would be gradual and will not have to rise much further to reach the neutral rate. The Dow Jones Industrial Average was up 0.69 percent, at 21,555.97. The S&P 500 was up 0.67 percent, at 2,442.01 and the Nasdaq Composite  was up 0.83 percent, at 6,244.89. All 11 major S&P 500 sectors were higher, with the defensive utilities index’s 0.91 percent rise leading the advancers. Stocks of Amazon.com edged up 0.7 percent after the online retailer said its Prime Day sale was the biggest shopping event by sales in its history.

In Bond Markets U.S. Treasury yields fell across the board on Wednesday after prepared remarks from Federal Reserve Chair Janet Yellen dampened growing expectations of more than one interest rate hike for the rest of the year. In early trading, the benchmark 10-year Treasury yield fell to 2.302 percent, its lowest in two weeks, from 2.362 percent late on Tuesday. It was last at 2.319 percent. The two-year yield fell as low as 1.331 percent from 1.379 percent on Tuesday and last traded at 1.3470 percent. Germany’s 10-year government bond yield fell to 0.515 percent