European Close Market Briefing – 19/09/2017 – by Arjun Lakhanpal

In European Equity Markets dealmaking talk lifted European telecom stocks on Tuesday, helping the unloved sector stand out in an otherwise quiet session, where investors were waiting for the outcome of a Federal Reserve meeting. The pan-European STOXX 600 index ended flat as traders awaited clues from the Fed about plans to start unwinding its $4.2-trillion portfolio of Treasuries and mortgage-backed securities. Telecoms stocks rose as much as 0.9 percent to their highest level in nearly four weeks after CNBC reported that U.S. wireless carriers T-Mobile US Inc and Sprint Corp  were in active merger talks. Deutsche Telekom, which controls T-Mobile US, was the biggest gainer, up more than 3 percent, but other stocks in the sector were also boosted by the report.

In Currency Markets the dollar weakened against a basket of currencies on Tuesday in advance of a Federal Reserve meeting where policymakers are expected to decide on the reduction of the central bank’s $4.2 trillion worth of bond holdings. The greenback was steady at 111.57 yen, below its eight-week peak of 111.87 set earlier Tuesday. Earlier Tuesday, the yen hit a 21-month trough versus the euro, while the Swiss franc hit its lowest level against it since January 2015. The common currency reached a one-week high versus the greenback at $1.2005. The index that tracks the dollar against six currencies was down 0.1 percent at 91.928, which was not far from the over 2-1/2 year low set on Sept. 8.

In Commodities Markets  oil prices edged lower on Tuesday, retreating from near-five-month highs in advance of data expected to show a build in U.S. crude inventories as imports resume and refineries were still restarting after recent storm activity. Brent crude futures were down 45 cents at $55.03 a barrel, not far off a five-month high of $55.99. U.S. West Texas Intermediate crude futures fell 38 cents to $49.53.  Spot gold was up 0.3 percent at $1,310.51 an ounce, off the previous day’s low of $1,304.10. Silver was up 0.1 percent at $17.16 an ounce, while platinum was 0.7 percent lower at $948.65 an ounce. Palladium was down 2.1 percent at $916.14, having earlier slid to its lowest in a month at $908.97 an ounce.

In US Equity Markets  stocks were little changed on Tuesday as investors held back from making major bets ahead of the Federal Reserve’s policy meeting that is expected to roll out a plan to pare the central bank’s debt holdings. The Dow Jones Industrial Average was up 0.07 percent, at 22,347.51, the S&P 500 was up 0.01 percent, at 2,504.19 and the Nasdaq Composite was up 0.04 percent, at 6,457.05. Seven of the 11 major S&P sectors were higher, led by a 1.56 percent gain in the telecom services sector. Health index was the biggest laggard on the S&P, pulled lower by United Health’s 1.8 percent fall. Tesla was down more than 2.4 percent after Jefferies started coverage of the electric car maker’s stock with “underperform”.

In Bond Markets U.S. Treasury prices gained slightly on Tuesday but yields held within a tight range as investors waited on the conclusion of the Federal Reserve’s two-day policy meeting for new indications on whether an additional interest rate hike is likely this year. Benchmark 10-year notes were last up 3/32 in price to yield 2.22 percent, from 2.23 percent late on Monday. Treasury yields briefly rose on Tuesday after data showed that U.S. import prices recorded their biggest increase in seven months in August as the cost of petroleum rose and there were also signs of a pickup in underlying imported inflation.