European Close Market Briefing – 23/05/2017 – by Arjun Lakhanpal

In European Equity Markets stocks closed in the green on Tuesday, with French shares among the biggest advancers as eurozone economic activity remained at a six-year high.  The pan-European STOXX 600 index ended up 0.2 percent. Germany’s DAX was up 0.3 percent while euro zone blue chips gained 0.5 percent. European tech firms were standout performers, with the sector up 1.4 percent after shares in Nokia jumped 6.4 percent to their highest since February 2016 following the settlement of a patent dispute with Apple. Greece’s ATG index fell after euro zone finance ministers failed to agree debt relief for Athens with the International Monetary Fund and did not release new loans.

In Currency Markets  the dollar struggled to recover ground against other major currencies on Tuesday as lingering U.S. political risk and strong European data kept the greenback in check. The euro was down 0.06 percent against the dollar at $1.1229. The common currency rose as high as $1.1267, its highest since Nov. 9, earlier in the session. The dollar was down 0.12 percent against the yen and 0.16 percent weaker against the Swiss franc. Meanwhile, sterling was up 0.08 percent against the dollar to $1.3008, recovering ground after falling on a suicide bombing in the English city of Manchester and concerns over the ruling Conservative Party’s campaign for next month’s election putting the currency on the defensive.

In Commodities Markets oil prices inched up on Tuesday in volatile trading as expectations of an extension to OPEC-led supply cuts and another decrease in U.S. crude inventories overshadowed a White House proposal to sell half the country’s petroleum reserves. Brent crude traded up 9 cents at $53.96 per barrel. U.S. light crude was up 12 cents at $51.25. The OPEC meets in Vienna on Thursday to consider whether to prolong the deal reached in December in which OPEC and 11 non-members, including Russia, agreed to cut output by about 1.8 million barrels per day in the first half of 2017.  Spot gold edged up 0.2 percent to $1,262.10 an ounce and silver was up 0.6 percent at $17.23 an ounce.

In US Equity Markets  stocks trimmed their gains on Tuesday morning, weighed down by weak economic data, while investors await more details from President Donald Trump’s first full budget plan aimed at slashing government spending. The Dow Jones Industrial Average was up 0.19 percent, at 20,934.04, the S&P 500 was up 0.14 percent, at 2,397.52 and the Nasdaq Composite was down 0.03 percent, at 6,131.82.  Consumer discretionary was the biggest laggard with a 0.32 percent decline, as auto part retailers weighed. Autozone fell 8.5 percent after the auto part retailer’s quarterly results came in below expectations. Advance Auto Parts, O’Reilly Automotive and Genuine Parts were down between 2.6 percent and 3.9 percent.

In Bond Markets U.S. Treasury yields rose modestly on Tuesday as some investors and dealers made room for $26 billion of two-year notes, the first part of this week’s $88 billion in coupon-bearing government bond supply. The benchmark 10-year Treasury yield was 2.269 percent, up over 1 basis point from late on Monday, while the 30-year yield was 1 basis point higher at 2.926 percent.