European Close Market Briefing – 07/06/2017 – by Arjun Lakhanpal

In European Equity Markets banks and utilities supported stocks on Wednesday, with relief that Spain’s struggling Banco Popular was being rescued by Santander lifting bank shares. The STOXX 600 index fell 0.1 percent, weighed down by a late decrease in energy stocks. Britain’s FTSE 100 index fell 0.6 percent and Germany’s DAX inched 0.1 percent. Although shares in Santander fell 0.9 percent in choppy trade and Banco Popular’s were suspended, European banks were among the standout performers, gaining 0.7 percent. Santander said it would buy Popular and carry out a capital increase of around 7 billion euros. Spain’s Bankia, Italy’s UniCredit and France’s Societe Generale were all up between 1 percent and 4.9 percent.

In Currency Markets the euro was slightly weaker against the dollar on Wednesday, in choppy trading, on reports suggesting the European Central Bank would lower its inflation targets at Thursday’s policy announcement. The euro was down 0.11 percent to $1.1263, after having fallen to a low of $1.1205, its lowest since Friday. Against the yen, the greenback was down 0.06 percent to 109.33 yen. terling was up 0.39 percent to $1.2957, staying near seven-month highs as investors increasingly take the view that Prime Minister Theresa May’s Conservative Party will win a majority in parliament. The dollar index, which tracks the greenback against six major rivals, was down 0.02 percent at 96.614.

In Commodities Markets oil prices slid more than 3 percent on Wednesday after the U.S. government reported an unexpected increase in inventories of crude and gasoline, fanning fears that output cuts by major world oil producers have not drained the global crude glut very much. Crude stocks in the United States grew 3.3 million barrels to 513 million barrels, according to the U.S. Energy Information Administration. U.S. crude futures fell 4.3 percent to $46.16 a barrel. Brent crude prices were at $48.40 per barrel, down 3.4 percent. Spot gold was down 0.2 percent at $1,291.1 an ounce. Among other precious metals, platinum fell 0.7 percent to $949.5 an ounce and palladium slid 1.6 percent to $839.5.

In US Equity Markets stocks pared early gains to trade little changed in late morning trading on Wednesday as oil prices fell, while investors remained cautious ahead of major political and economic events on Thursday. The Dow Jones Industrial Average was up 0.05 percent, at 21,147.24 and the S&P 500 was up 0.06 percent, at 2,430.81. The Nasdaq Composite was up 0.27 percent, at 6,292.23. Five of the 11 major S&P 500 sectors were lower, with the energy index’s 1.26 percent fall leading the decliners. Oil majors Exxon and Chevron were down about 1 percent and were among the biggest drags on the S&P and the Dow. Shares of Navistar International were down 1.7 percent after the truck and engine maker posted a quarterly loss.

In Bond Markets U.S. Treasury debt prices fell on Wednesday, with yields trading within narrow ranges, as investors consolidated positions ahead of a key events on Thursday, including a European Central Bank policy meeting and Britain’s general election.  In mid-morning trading, U.S. 10-year Treasuries were last down 4/32 in price, with yields at 2.160 percent, from 2.147 percent late on Tuesday. U.S. 30-year bonds fell 9/32 in price, yielding 2.824 percent, compared with Tuesday’s 2.81 percent.