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03 Jan 2017 18:38 GMT+0 - Closing Wrap

In European Equity Markets a third day of gains propeled stocks into a bull market as data from the U.S. to China signaled a strengthening global economy. The pan-European STOXX 600 closed 0.7 percent higher after hitting its highest level since December 2015. Britain's FTSE 100, shut on Monday for a holiday, closed 0.5 percent higher at 7,177.89 points. Credit Suisse and Bank of Ireland were also among top STOXX gainers, with their shares rising 6.4 percent and 6.8 percent respectively. Euronext rose nearly 7 percent after London Stock Exchange Group agreed to sell its French clearing business to Euronext for 510 million euros ($534 million) in its bid to win regulatory approval for a merger with Deutsche Boerse. 


In Currency Markets the U.S. dollar rose to its highest in 14 years against the euro and a basket of major currencies on Tuesday after data showed solid growth in U.S. manufacturing.  The euro fell to a 14-year low against the dollar, falling to $1.0342 after the data's release. The dollar gained against the yen as well, reaching 118.60 yen, its highest since Dec. 15 and just a hair below its highest point since February as a holiday in Japan thinned Asian trading. The greenback also rose against the Swiss franc to its highest since Dec. 15. The dollar index rose to 103.820, its highest level since December 2002 after data showed U.S. factory activity accelerated to a two-year high last month and construction spending rose to its highest in 10-1/2 years in November.


In Commodities Markets  oil prices turned negative after earlier hitting 18-month highs on Tuesday, the first trading day of 2017, as the U.S. dollar rallied to its highest since 2002. Brent futures were down 1.7 percent, at $55.87 a barrel. West Texas Intermediate crude fell 1.8 percent, to $52.77 per barrel. Earlier in the session, both oil contracts hit their highest levels since July 2015 with Brent reaching $58.37 and U.S. $55.24, before paring gains on the strong U.S. dollar.  Spot gold was flat at $1,151.66 an ounce, while U.S. gold futures for February delivery were up 90 cents at $1,152.60. Silver was up 0.8 percent on Tuesday at $16.06 an ounce. Spot platinum was up 4.6 percent at $940.80, while sister metal palladium rose 4.7 percent to $710.30.


In US Equity Markets  stocks on Tuesday pared gains, but were still in the green, as oil prices turned sharply lower, taking off some of the initial 2017 exuberance that underpinned an early triple-digit rise in the Dow. The Dow Jones Industrial Average traded up 0.2 percent to 19,808. The S&P 500 rose 0.4 percent to 2,248 and the Nasdaq Composite Index rose 0.4 percent to 5,403.  Sharp declines in shares of Travelers Cos and McDonald's, helped to limit the blue-chip average's advance. Xerox Corp rose 15 percent after Credit Suisse upgraded the company to "outperform". In the latest economic data, the Institute for Supply Management said its manufacturing index climbed to 54.7 in December from 53.2.  


In Bond Markets  European government bonds declined amid signs inflationary pressures are building in the region, clouding the outlook for monetary policy in 2017. The yield on Germany's 10-year bunds rose six basis points, or 0.06 percentage point, to 0.248 percent, having earlier touched its highest since Dec. 23. Similar-maturity U.K. gilt yields climbed eight basis points, the most since Dec. 15, to 1.32 percent. France 10-year yield climbs 8 bps to 0.75 percent, while Ireland's rises 12 bps to 0.87 percent. Treasury 10-year yields rise 6 bps to 2.503 percent. 




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