European Close Market Briefing – 26/09/2017 – by Arjun Lakhanpal

In European Equity Markets stocks were flat on Tuesday after a selloff in technology shares on Wall Street and as tensions over Korea persisted, while investors were awaiting further clues on whether U.S. interest rates will rise in December. German drugs and chemicals maker Merck rose 2 percent as UBS initiated coverage with a “buy” rating, saying its ability to grow its Life Science and Performance Materials divisions was not sufficiently taken into account. Germany’s Thyssenkrupp lost 0.75 percent after it raised almost 1.4 billion euros in a share sale to help fund its industrial goods businesses after the planned merger of its steel operations with Tata Steel next year. Its rival, European champion ArcelorMittal, was up 1.4 percent.

In Currency Markets the euro fell to its lowest level in a month on Tuesday as worry about political fallout in Germany and other euro zone countries grew. A speech by French President Emmanuel Macron failed to stem outflows from the single currency, which fell its lows of the day as he spoke. The euro slipped half a percent to as low as $1.1781, its weakest since Aug. 25, after falling around 0.9 percent on Monday, its heaviest one-day loss since December. New Zealand’s dollar extended the previous day’s slide to its lowest since Sept. 7, after the country’s National Party won the largest number of votes in Saturday’s election but not enough seats to govern outright.

In Commodities Markets Brent oil prices fell on Tuesday after investors took profit following a rally to 26-month highs spurred largely by threats from Turkey to cut crude exports from Iraq’s Kurdistan region. Brent crude futures fell 85 cents to $58.17 a barrel, having hit $59.49, the highest since July 2015 and more than 34 percent above their 2017 low. U.S. crude futures slid 54 cents to $51.68 a barrel, after hitting a five-month high of $52.43. Turkish President Tayyip Erdogan repeated a threat to cut off the pipeline that carries 500,000-600,000 barrels per day (bpd) of crude from northern Iraq to the Turkish port of Ceyhan, intensifying pressure on the Kurdish autonomous region over its independence referendum.

In US Equity Markets stocks gave up early gains on Tuesday as rising tensions between the United states and North Korea weighed, while investors awaited Fed Chair Janet Yellen’s speech for more clarity on interest rate hikes. Nine of the 11 major S&P sectors were higher, with the technology sector’s 0.22 percent rise leading the gainers. Majors indices were flat.  Apple rose 1.5 percent to $152.54, posting its first rise in four sessions and propping up the three major indexes, after Raymond James raised price target by $10 to $170. Nvidia was up more than 4 percent, following a launch of an artificial intelligence-related software product.

In Bond Markets U.S. Treasury yields rose to session highs on Tuesday in the aftermath of U.S. President Donald Trump’s remarks on a tax proposal that raised concerns that it might increase federal deficit and borrowing. At 15:30 GMT, benchmark 10-year Treasury yield was 2 basis points higher at 2.243 percent, while the 30-year yield was up nearly 3 basis points at 2.786 percent.