In European Equity Markets the pan-European Stoxx 600 closed up 0.88 percent, with all sectors and major bourses in positive territory. Banks sat among the best performers Monday, with Italian lenders getting a boost after reports that their capital positions were higher than the levels required by the ECB. Banco BPM rose almost 7 percent, to the top of the Stoxx 600. Deutsche Post rose 3 percent after a report suggested Germany could grant the postal services firm with a higher-than-anticipated increase in postage for letters from the summer.

 

In Currency Markets the U.S. dollar jumped on Monday as concerns grew that the latest round of U.S.-China talks may not yield a deal between the world’s largest economies before the March deadline. Monday morning’s move in the dollar reverberated across currency markets, driving the euro to its lowest since Dec. 14 at $1.127. The dollar strengthened to 110.45 Japanese yen and to $1.286 against the British pound. China markets reopened on Monday morning after a one-week holiday break, with the dollar last 0.71 percent higher versus the yuan at 6.791.

 

In Commodities Markets oil prices fell on Monday as an uptick in U.S. drilling, a shutdown caused by a fire at a major U.S. refinery and concerns about U.S.-Chinese trade talks all overshadowed support from OPEC-led supply restraint. Benchmark Brent oil were down 71 cents, or 1.14 percent, to $61.39 a barrel. U.S. West Texas Intermediate (WTI) crude fell $1.19 cents or 2.26 percent to $51.53. Energy firms in the United States last week increased the number of oil rigs operating for the second time in three weeks, pointing to a further rise in U.S. crude production.

 

In US Equity Markets stocks rose on Monday, led by industrial companies, as the United States and China began their latest round of trade talks to hammer out a deal before the looming March deadline. The S&P 500 was up 0.35 percent, at 2,717.31 and the Nasdaq Composite rose 0.51 percent, at 7,335.61. The energy sector fell 0.54 percent and was the only S&P sector in red. Electronics Arts Inc gained 8.8 percent after analysts were upbeat about a strong start to the videogame publisher’s newly launched rival to “Fortnite”

 

In Bond Markets Italian government bonds outperformed the rest of the euro zone debt market on Monday, with yields falling after the Bank of Italy data showed banks shed more than 17 billion euros in gross bad loans in December. Support for riskier assets was reflected in a sell-off in core euro zone paper, with Germany’s 10-year bond yield rising three basis points to 0.11 percent, having dropped as low as 0.077 percent on Friday.  Italian two- and five-year bond yields fell over 10 bps each after the Bank of Italy reported a 34 percent year-on-year fall in impaired loans.

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