European Close Market Briefing – 15/06/2017 – by Arjun Lakhanpal

In European Equity Markets stocks fell on Thursday as sagging oil prices hit basic resources stocks, while retailers fell after H&M missed expectations and UK data showed consumers are feeling the impact of rising inflation.  The pan-European STOXX 600 benchmark fell to its lowest since April 24 before paring some losses and ended down 0.4 percent. Euro zone stocks and blue-chips fell 0.6 percent. Basic resource stocks fell 1.7 percent while energy stocks fell 0.6 percent. H&M shares fell 5.5 percent after May sales missed forecasts, adding to a string of softer figures from the Swedish fashion retailer, which blamed tough trading conditions. Telecoms firm Proximus fell 3.6 percent after suffering a cut to ‘sell’ from Citi.

In Currency Markets the dollar rose to its highest in more than two weeks on Thursday as solid readings on the U.S. economy helped strengthen the case for the Federal Reserve to continue tightening monetary policy this year.  The dollar index, which tracks the U.S. currency against six major peers, rose to 97.557, its highest since May 30. The dollar also hit its highest against the euro, Swiss franc and Swedish crown since May 30 following the data’s release. The greenback rose to a six-day high against the Japanese yen of 110.64 yen. Sterling was flat in North American trading after it jumped more than a cent on signs of a shift in the Bank of England’s stance on keeping interest rates at record lows. It was last little changed against the dollar at $1.2757.

In Commodities Markets oil prices were down more than half a percent after hitting a six-month low on Thursday, remaining under pressure from high global inventories and fears that OPEC’s agreed production cuts cannot offset rising production elsewhere. Brent crude touched a low of $46.70 a barrel on Thursday, weakest since May 5 and just above six-month lows, before recovering. U.S. crude was down 21 cents at $44.52, after earlier touching a six-month low of $44.32 a barrel. Spot gold fell 0.6 percent to $1,253.09 per ounce. Among other precious metals, silver shed 1 percent to $16.71 per ounce. Platinum fell 1.9 percent to $918, having hit the lowest in over a month at $913.50, while palladium shed 0.5 percent to $858.70 per ounce

In US Equity Markets  technology stocks were under pressure yet again on Thursday, pulling lower all the three major Wall Street indexes, as investors fretted about bloated valuations. The Dow Jones Industrial Average was down 0.28 percent, at 21,314.98, the S&P 500 was down 0.56 percent, at 2,424.22 and the Nasdaq Composite was down 1.04 percent, at 6,130.60. Eight of the 11 major S&P 500 sectors were lower.  Among stocks, Kroger was down 12.5 percent after the supermarket chain operator cut its full-year profit forecast. Mattel was down 7.2 percent after the toymaker cut its dividend. The CBOE Volatility index hit 11.61 points – its biggest percentage gain in nearly one month.

In Bond Markets U.S. Treasury yields edged higher on Thursday after some stronger-than-expected U.S. economic data, with two-year yields touching their highest in three months, although most yields remained depressed after their biggest plunge in a month Wednesday. Benchmark 10-year Treasuries were last down 4/32 in price to yield 2.153 percent, from a yield of 2.138 percent late Wednesday.  U.S. two-year yields hit 1.368 percent, the highest since mid-March.