European Close Market Briefing – 07/12/2017 – by Arjun Lakhanpal

In European Equity Markets stocks edged up on Thursday as financial and tech stocks recovered, while troubled furniture retailer Steinhoff sank further, stung by an accounting scandal. Investors recovered their risk appetite, pushing euro zone stocks up 0.2 percent, with financials the strongest sector, helping the bank-heavy Italian and Spanish markets outperform strongly with gains of 0.6 to 0.7 percent. Shares in Steinhoff lost 45 percent after the South African retailer revealed accounting irregularities and its chief executive quit. The telecoms sector enjoyed strong gains thanks to French operator Orange rising 2.1 percent after it set out plans to add customers and boost profit margins by investing in its networks rather than buying foreign rivals.

In Currency Markets the dollar rose to a two-week high against a basket of currencies on Thursday, recovering losses against the yen, on stronger risk appetite across markets and on optimism the United States will successfully push through a tax reform program. The euro fell to a two-week low of $1.1776 against a stronger dollar. It was last slightly down on the day at $1.1787. The dollar edged up 0.35 percent against the yen to 112.66. Sterling rose 0.28 percent to $1.3430 after falling as low as $1.3387 amid fears that a Brexit deal may not be reached ahead of next week’s European Union summit.  Against a basket of currencies, the dollar hit a two-week high of 93.745. It was last up 0.1 percent at 93.696.

In Commodities Markets  oil prices climbed more than 1 percent on Thursday due to a threatened strike in Nigeria and as traders cover shorts after sharp losses the previous day brought on by an unexpectedly large rise in U.S. stocks of refined fuels. Brent futures were up 1.4 percent, at $62.07 a barrel, while U.S. West Texas Intermediate crude was up 1.1 percent, at $56.59. Data from the Energy Information Administration on Wednesday showed that U.S. crude oil inventories fell by 5.6 million barrels in the week to Dec. 1, to 448.1 million barrels.  Spot gold was down 0.6 percent at $1,255.85 an ounce and silver was down 0.4 percent at $15.90 an ounce after earlier falling to its lowest since mid-July at $15.82.

In US Equity Markets  the three major indexes rose in late morning trading on Thursday with stocks of technology companies leading the pack, followed by industrials. The Dow Jones Industrial Average was up 0.2 percent, at 24,188.69 and the S&P 500 was up 0.24 percent, at 2,635.57. The Nasdaq Composite was up 0.67 percent, at 6,821.50. General Electric  rose 1.6 percent after the industrial conglomerate said it was cutting 12,000 jobs at its global power business. Lululemon Athletica gained 8 percent after the Canadian yoga and leisure apparel maker reported a higher-than-expected profit and gave an upbeat holiday season forecast. Chipmaker Broadcom’s upbeat profit and dividend raise received investor support with shares rising.

In Bond Markets  U.S. Treasury yields were little changed on Thursday, shrugging off a report on U.S. unemployment as investors held off on major moves ahead of the all-important nonfarm payrolls report expected Friday. The difference between yield on 2- and 10-year notes touched a fresh 10-year low on Wednesday before retracing the move.  Benchmark U.S. 10-year Treasury notes were flat, yielding 2.33 percent. U.S. 2-year notes were also little moved from their late Wednesday levels at 1.81 percent.