European Close Market Briefing – 17/07/2017 – by Arjun Lakhanpal

In European Equity Markets stocks gave back early gains in thin volumes on Monday, as a busy few weeks of earnings reports from top regional and U.S. firms got underway. The pan-European STOXX 600 index steadied at the close after touching a three-week high, while blue chips turned negative to trade 0.3 percent lower. British engineer Weir Group rose more than 8 percent after increasing its forecasts for its oil and gas units, thanks to strong North American drilling activity. Updates from some Nordic firms spurred sizeable moves too, with shares in Norway’s Telenor jumping more than 8 percent. Swedish engineers Atlas Copco and Sandvik also fell 4.6 to 7.5 percent after their results, which slightly underperformed high expectations.

In Currency Markets the U.S. dollar hit its lowest level against a basket of major currencies in 10 months on Monday and the Australian dollar hit a more than two-year high on strong Chinese economic data and doubts that the Federal Reserve would raise interest rates again this year. The euro was last mostly flat against the dollar at $1.1465 , while the dollar recovered from Friday’s nearly two-week low against the yen of 112.24 yen to last trade 0.3 percent higher against the Japanese currency at 112.83 yen. Against the Mexican peso, the dollar hit 17.5340 pesos , putting it near Friday’s more than one-year low of 17.530. The dollar index touched its lowest since last September of 95.018.

In Commodities Markets oil edged up to about $49 a barrel on Monday after fewer drilling rigs were added in the United States last week, helping ease concerns that rising shale supplies will undermine OPEC-led production cuts. Brent crude was up 8 cents at $48.99 a barrel. U.S. crude traded at $46.57, up 3 cents. U.S. drillers added two oil rigs in the week to July 14, bringing the total to 765, Baker Hughes said on Friday. Spot gold was up 0.6 percent at $1,235.57 per ounce. Spot silver rose 1.4 percent to $16.17 per ounce after hitting $16.18, the highest in nearly two weeks. Platinum gained 1.6 percent to $929.74 per ounce after touching its highest in three weeks at $932.50. Palladium added 0.6 percent to $862.80 per ounce.

In US Equity Markets stocks were little changed and hovered near record levels in late morning trading on Monday as investors geared up for a busy earnings week from big U.S. companies. The Dow was up 0.02 percent, at 21,641.47, the S&P 500 was up 0.08 percent, at 2,461.24. The Nasdaq Composite was up 0.09 percent, at 6,317.83. Eight of the 11 major S&P sectors were higher, with the consumer discretionary index’s 0.36 percent rise leading the advancers. The financial sector led the laggards with a 0.15 percent fall after results and forecasts on Friday by big banks such as JPMorgan, Citigroup and Wells Fargo failed to excite investors. Shares of BlackRock fell 3.2 percent after the world’s biggest asset manager’s quarterly profit came in below expectations.

In Bond Markets U.S. Treasury yields were little changed to slightly higher on Monday, trading in narrow ranges, after a fairly volatile week highlighted by soft U.S. inflation and retail sales data, with investors unsure about the market’s direction.  In late morning trading, U.S. 10-year yields rose to 2.328 percent, from 2.319 percent late on Friday. U.S. 30-year bonds were down 1/32 in price, yielding 2.913 percent, from 2.910 percent Friday. U.S. two-year yields were up at 1.363 percent, from Friday’s 1.356 percent.