In European Equity Markets stocks inched higher on Thursday, with investors less keen to chase the previous session’s strong rally that came on the back of the relatively dovish tone struck by Fed chair Janet Yellen overnight. The pan-European STOXX 600 was up 0.4 percent, slightly ahead of euro zone stocks and blue-chips. Cyclicals were back to the fore on Thursday, however, with banks, which gain from higher rates, up 0.6 percent. Shares in French industrial group Alstom rose 2.9 percent after it reported sales improved from a year ago, and maintained financial targets. Shares in Mercedes maker Daimler fell 1.5 percent to the bottom of the DAX after a report accusing the carmaker of selling cars with excess emissions.
In Currency Markets the Australian and New Zealand dollars were the biggest beneficiaries of a second day of gains for stock markets on Thursday, comments by U.S. Federal Reserve chair Janet Yellen bolstering a global rally that dates back 7 years. The kiwi and Aussie dollars rode out a poor set of New Zealand data to stand respectively 1.5 percent and 0.8 percent higher on the day, leading gains for the G10 group of developed world currencies along with the Swedish crown. The euro climbed to $1.1415 from as low as $1.1370, hit after earlier ECB policymaker talk of extending stimulus. Against a basket of currencies, the dollar was still within a whisker of nine-month lows at 95.75 as it levelled off in early U.S. trading.
In Commodities Markets oil prices steadied on Thursday after evidence of stronger demand in China balanced reports of higher production by key OPEC exporters in a downbeat report by the International Energy Agency (IEA). Brent crude was up 5 cents at $47.79 a barrel. U.S. light crude was 15 cents higher at $45.64. China imported 8.55 million barrels per day (bpd) of oil in the first six months of this year, up 13.8 percent on the same period in 2016, making it the world’s biggest crude importer ahead of the United States. U.S. crude oil inventories fell last week by the most in 10 months, while gasoline stocks decreased, the Energy Information Administration said on Wednesday.
In US Equity Markets stocks were slightly higher in early trading on Thursday, ahead of Fed Chair Janet Yellen’s second day of testimony and a day after she signaled a dovish stance on interest rates. The Dow Jones Industrial Average was up 0.1 percent, at 21,552.81, the S&P 500 was up 0.13 percent, at 2,446.50. The Nasdaq Composite was up 0.16 percent, at 6,271.05. Six of the 11 major S&P 500 sectors were higher, with the technology index’s 0.33 percent rise leading the advancers. Delta shares were down 2.3 percent, after the No.2 U.S. airline’s quarterly profit missed analysts’ expectations. Target rose 3.8 percent after the retailer said it expects a “modest” increase in second-quarter comparable sales, the first rise in five quarters.
In Bond Markets U.S. Treasury yields rose on Thursday after falling for three straight days, tracking gains in German bond yields with solid U.S. economic data supporting their trend higher. In mid-morning trading, the 10-year Treasury yield was at 2.333 percent, up from 2.327 percent late on Wednesday. Germany’s benchmark 10-year bond yield was back above 0.50 percent on Thursday after a report that the European Central Bank was likely to signal in September that its will gradually unwind its asset purchase program next year.
European Equity Upgrades/Downgrades
- TAYLOR WIMPEY (TW LN) UPGRADED TO OVERWEIGHT FROM EQUALWEIGHT AT BARCLAYS
- NATIONAL GRID (NG/ LN) UPGRADED TO BUY FROM HOLD AT HSBC
- WPP (WPP LN) UPGRADED TO BUY FROM NEUTRAL AT NATIXIS
- SIEMENS (SIE GY) DOWNGRADED TO HOLD FROM BUY LIBERUM
- DAILMER (DAI GY) UPGRADED TO NEUTRAL AT EXANE
- ARCELORMITTAL (MT NA) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK
- STATOIL (STL NO) DOWNGRADED TO NEUTRAL FROM OVERWEIGHT AT JP MORGAN