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15 Dec 2016 18:14 GMT+0 - Closing Wrap

In European Equity Markets stocks rose on Thursday, helped by gains in global banks following the U.S. Federal Reserve's interest rate hike overnight, while growing corporate deal activity continued to underpin year-end optimism. The pan-European STOXX 600 was trading up 0.2 percent, inching back towards an 11-month high scaled earlier this week. The European banking index was up 1.5 percent, boosted by a 2.1 to 4 percent rise in lenders such as Deutsche Bank, BNP Paribas, Societe Generale and Barclays following the Fed's move. French utility EDF fell around 12 percent, wiping off about 2.5 billion euros from the company's market value, after warning of lower earnings in 2017. 

 

In Currency Markets the U.S. dollar rose to its highest level in 14 years against a basket of major currencies on Thursday on anticipation of a more hawkish Federal Reserve and a boost in U.S. economic growth under President-elect Donald Trump. The dollar was last up 1.14 percent against the yen at 118.35 yen after rising as much as 1.4 percent to 118.66 yen, its highest level since early February. The euro was down 1.08 percent at $1.0421 after falling as much as 1.3 percent to $1.0396, its lowest since early January 2003. The dollar hit a more than one-year high against the Swiss franc of 1.0324 francs. The dollar index jumped as much as 1.5 percent to a roughly 14-year high of 103.320. 

 

In Commodities Markets  oil prices fell on Thursday as the dollar rallied in the wake of a rise in U.S. interest rates, despite forecasts of a tighter oil market in 2017 due to planned output cuts. Brent futures for February delivery fell 0.6 percent, to $53.59 a barrel. U.S. crude, meanwhile was down 1.2 percent, to $50.41 per barrel.  Spot gold hit a 10-1/2 month low of $1,126.48 an ounce, and was down 1.3 percent at $1,129.47 an ounce. U.S. gold futures for February delivery were $32.70, or 2.8 percent, lower at $1,131.00.  Silver was down 4.4 percent at $16.08 an ounce, having earlier hit its lowest since June at $15.89, and platinum was 1.5 percent lower at $909.99. Palladium was up 0.4 percent at $722.50.

 

In US Equity Markets  stocks hovered near record highs on Thursday as bank stocks rose, and investors viewed the Federal Reserve's interest rate outlook as a sign of confidence in the economy. The S&P 500  was up 0.64 percent, at 2,267.89. The Nasdaq Composite was up 0.6 percent, at 5,469.37. All 11 major S&P sectors were higher, with the financial index's 1.46 percent rise leading the gainers. Mondelez was up 5.3 percent after reports that Kraft Heinz  may buy the Cadbury chocolate maker. Kraft rose 1.1 percent. Yahoo fell 5.2 percent after CNBC reported that Verizonis weighing scrapping its deal with the company after it disclosed the largest security breach in history.

 

In Bond Markets  U.S. Treasury yields rose broadly on Thursday, boosted by the prospect of more interest rate increases by the Federal Reserve next year, although those on long-dated bonds came off their highs after fairly tame consumer inflation data for November. Benchmark 10-year Treasury prices were down 12/32, yielding 2.567 percent, up 4 basis points from levels late on Wednesday. U.S. 30-year bond yields were yielding 3.149 percent, up slightly from the previous session. U.S. two-year notes yielded 1.2636 percent, up almost 3 basis points from Wednesday.

 

 

European Equity Upgrades/Downgrades

  • ROYAL DUTCH SHELL (RDSA LN) DOWNGRADED TO SECTOR PERFORM FROM SECTOR OUTPERFORM AT SCOTIA HOWARD
  • MTU AERO ENGINES (MTX GY) UPGRADED TO OVERWEIGHT FROM NEUTRAL BY JPMORGAN
  • AGGREKO (AGK LN) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
  • DASSAULT AVIATION (AM FP) INITIATED WITH A SELL AT BERENBERG
  • SOCGEN (GLE FP) UPGRADED TO BUY FROM NEUTRAL AT NATIXIS
  • TELEFONICA (TEF SM) UPGRADED TO BUY FROM SELL AT DEUTSCHE BANK

 

 


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