In European Equity Markets stocks ended little changed on Friday as the euro’s rally dimmed appetite for regional stocks but talk about possible cuts to ECB stimulus boosted banks. The broader pan-European STOXX 600 benchmark edged 0.15 percent higher, while euro zone blue chips ended unchanged. After suffering four straight sessions in the red, European banks rose 0.9 percent, leading gainers in Europe. In the automobile sector, Volkswagen was up 0.5 percent after reports it was actively working on deals to sell non-core assets accounting for as much as 20 percent of the German carmaker’s annual revenues. Peugeot fell 3.1 percent after Exane BNP Paribas cut its target price by 4 percent and its rating to “underperform” from “neutral”.
In Currency Markets the U.S. dollar hit its lowest in more than 2-1/2 years against a basket of major rivals on Friday on reduced expectations for another Federal Reserve rate increase this year, while the euro spiked to multi-year highs in the wake of a European Central Bank meeting. The safe-haven Japanese yen also strengthened 0.63 percent versus the greenback at 107.79 per dollar. The euro rose as much as 0.6 percent on the day to briefly hit its highest since January 2015 of $1.2092. Against a basket of major currencies, the dollar fell 0.37 percent. It touched a low of 91.011, its weakest level since January 2015. Sterling rose 0.62 percent to $1.3192, as data showed both manufacturing and industrial growth remained solid in July.
In Commodities Markets oil prices fell on Friday after almost a week of rises as Hurricane Irma, one of the most powerful storms in a century, drove toward Florida and the U.S. Southeast after destroying islands in the Caribbean. U.S. light crude oil was down 1.8 percent lower at $48.22 a barrel. Brent crude was down 0.6 percent at $54.16 a barrel after reaching its highest level since April at $54.80. U.S. oil output fell by almost 8 percent because of Harvey, from 9.5 million barrels per day (bpd) to 8.8 million bpd, according to the Energy Information Administration. Spot gold was down 0.2 percent at $1,346.45 after earlier hitting $1,357.54, its highest since August 2016. Silver was down 0.1 percent at $18.05 an ounce.
In US Equity Markets stocks were mixed in choppy late morning trading on Friday as investors assessed the financial impact of Hurricane Harvey and tracked Hurricane Irma as it plowed toward Florida. The Dow was up 0.16 percent, at 21,820.09 and the S&P 500 was down 0.05 percent, at 2,463.78. The Nasdaq Composite was down 0.28 percent, at 6,380.25. Six of the 11 major S&P indexes were lower, with the teleservices and energy sectors leading the decliners. The financial sector rose 1.18 percent, leading the advancers, recovering from a 1.6 percent decline on Thursday. Equifax sank more than 15 percent after the provider of consumer credit scores said personal details of as many as 143 million U.S. consumers were hacked.
In Bond Markets U.S. long-dated Treasury yields rose from 10-month lows on Friday, in line with gains in Europe. In mid-morning trading, benchmark 10-year Treasury yields rose to 2.064 percent, from 2.061 percent late on Thursday. Ten-year yields earlier fell to 2.016 percent, a 10-month low. U.S. 30-year bond yields rose to 2.684 percent, up from 2.678 percent the previous session. Germany’s benchmark 10-year bond yield rose 2 basis points to 0.32 percent, having fallen to its lowest level since late June in early trade at 0.286 percent.
European Equity Upgrades/Downgrades
- BURBERRY (BRBY LN) UPGRADED TO OUTPERFORM FROM NEUTRAL AT CREDIT SUISSE
- WH SMITH (SMWH LN) DOWNGRADED TO HOLD FROM BUY AT DEUTSCHE BANK
- GSK (GSK LN) DOWNGRADED TO UNDERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY
- LANXESS (LXS GY) UPGRADED TO BUY FROM HOLD AT HELVEA BAADER
- DRILLISCH (DRI GY) RESUMED WITH BUY FROM HOLD AT COMMERZBANK
- PEUGEOT (UG FP) CUT TO UNDERPERFORM AT EXANE
- VINCI (DG FP) DOWNGRADED TO EQUAL WIEGHT FROM OVERWEIGHT AT BARCLAYS
- AXA (CS FP) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
- ASHMORE (ASHM LN) UPGRADED TO NEUTRAL FROM UNDERPERFORM AT EXANE
- UNITED INTERNET (UTDI GY) RESUMED WITH BUY AT COMMERZBANK
- LEONI (LEO GY) STARTED WITH A SELL RATING AT UBS