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21 Dec 2016 18:21 GMT+0 - Closing Wrap

In European Equity Markets stocks rose slightly on Tuesday, holding near their highest levels since January, helped by a busy year-end for corporate deal making and more signs that Italy is making progress on stabilising its wobbly banking sector. Europe's STOXX 600 rose 0.5 percent with financials providing the biggest boost to the index.  Lloyds Banking Group rose 2.2 percent after saying it would buy MBNA from Bank of America for $2.4 billion, a move that would make the British lender the second-biggest credit card provider in the country. Euronext shares rose 2.5 percent after Deutsche Boerse and London Stock Exchange said they were in talks to offload LCH. Clearnet to the pan-European exchange operator ahead of their planned merger.

 

In Currency Markets the dollar retreated from a 14-year high on Wednesday, while the Swedish crown booked its biggest gains in six months after Sweden's central bank voted by a thin margin to extend its bond purchase programme. The euro was up 0.4 percent at $1.0423, rebounding from $1.0352 on Tuesday. The greenback fell 0.1 percent to 117.73 yen. Sweden's central bank, the Riksbank, kept interest rates on hold at -0.50 percent and extended its quantitative easing (QE) or bond purchase programme after a split board forced Governor Stefan Ingves to use his casting vote for the first time since 2008.  The euro was down 0.9 percent against the crown at 9.6190 crowns and the dollar was 1.3 percent weaker on the day at 9.2270 crowns.

 

In Commodities Markets  oil futures edged lower on Wednesday following a report showing a surprise build in U.S. crude inventories last week. U.S. crude stocks rose by 2.3 million barrels in the week to Dec. 16 as refineries hiked output, while gasoline stocks and distillate inventories fell, the U.S. Energy Information Administration said. Brent futures for February delivery fell 0.3 percent, to $55.20 a barrel. U.S. West Texas Intermediate crude for February was down 0.1 percent, to $53.24 per barrel. Spot gold was up 0.3 percent at $1,134.60 an ounce. Among other precious metals, silver was down 0.4 percent at $16.01 an ounce and platinum was 0.2 percent lower at $913.60 an ounce. Palladium was down 0.9 percent at $658 an ounce. 

 

In US Equity Markets   stocks eased in muted pre-holiday trading on Wednesday as investors paused a day after the Nasdaq Composite and the Dow Jones Industrial Average hit record highs. The Dow Jones industrial average was down 0.09 percent, at 19,956.84. The S&P 500 was down 0.12 percent, at 2,268.02 and the Nasdaq Composite was down 0.26 percent, at 5,469.87. Accenture fell 3.9 percent after the consulting and outsourcing software services provider's revenue forecast missed estimates. Twitter fell 3.8 percent after its chief technology officer said he would be leaving the company. FedEx fell 2.5 percent after the package delivery company's quarterly results missed expectations.

 

In Bond Markets U.S. Treasuries were steady in light trading volumes before the Christmas holiday with no new economic data due on Wednesday, as investors evaluated how many times the Federal Reserve is likely to raise interest rates next year. Benchmark 10-year notes were little changed in morning trade to yield 2.56 percent. Spanish 10-year yields stood at 1.36 percent, up 2.5 basis points on the day, having fallen as far as 1.31 percent, their lowest since Nov. 10, earlier in the day. Italian 10-year yields fell 1.6 bps to 1.83 percent, narrowing the spread between the two to 47 bps.

 

 

European Equity Upgrades/Downgrades

  • BP (BP/ LN) UPGRADED TO BUY FROM NEUTRAL AT UBS
  • SAIPEM (SPM IM) DOWNGRADED TO NEUTRAL FROM BUY AT UBS
  • STATOIL (STL NO) UPGRADED TO BUY FROM NEUTRAL AT UBS

 

 


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