In European Equity Markets indexes closed higher Tuesday as investors reacted to better-than-expected economic data and a tech rally in Asia. The pan-European Stoxx 600 closed 0.5 percent higher Tuesday. The autos sector rallied in afternoon trade, closing 1.5 percent higher. German tyre specialist Continental led the gains, finishing up over 5 percent on reports that it could restructure itself. Basic resources stocks also did well, closing up 1.2 percent. Mining giant Anglo American led the way. Europe’s telecoms sector ended the day’s trading 0.6 percent to the upside, boosted by corporate restructuring news. Altice led the gains on the European benchmark after its board announced plans to spin-off the firm’s U.S. unit from European operations. The telecoms and cable group topped the Stoxx 600, closing up nearly 11 percent.

 

In Currency Markets the US dollar climbed against a basket of major currencies on Tuesday, recovering further from last week’s decline to the lowest in more than three months. The dollar index, which measures the greenback against six rival currencies, was up 0.3 percent at 92.62. The euro extended losses from the previous session and slipped 0.38 percent to $1.192. On Thursday, it had hit a nearly four-month high of $1.2089. Sterling weakened, snapping a three-day rising streak as investors took profits, although expectations that Brexit talks will have a positive outcome continued to underpin the British currency. Sterling weakened as much as 0.5 percent to $1.3504 but remained within striking distance of a four-month high of $1.3614 hit last week.

 

In Commodities Markets oil prices edged higher on Tuesday, touching its highest since May 2015, supported by OPEC-led production cuts and expectations that U.S. crude inventories have declined for an eighth week. Brent crude was up 0.4 percent at $67.96 per barrel and earlier touched $68.29, its highest since May 2015. U.S. West Texas Intermediate crude (WTI) rose 0.8 percent to $62.09 and also reached its highest since May 2015 at $62.56. Supply reports this week from industry group the American Petroleum Institute and the U.S. government’s Energy Information Administration are expected to show U.S. crude stocks fell by 4.1 million barrels, an eighth week of decline. Gold was down 0.8 percent weighed down by a firmer dollar a positive stock market sentiment also sapped enthusiasm for bullion.

 

In US Equity Markets main indexes edged higher on Tuesday as healthcare and bank stocks gained in the run up to the quarterly earnings season that is set to start later this week. The S&P 500 was up 0.4 percent at 2,757.36. The Nasdaq Composite added 0.2 percent at 7,173.45. A 2.4 percent rise in Johnson & Johnson and a 5 percent jump in Boston Scientific helped the S&P health sector gain 0.9 percent. GoPro fell 6 percent, extending losses from Monday after the action camera-maker flagged a weak holiday quarter that triggered sale talks. The company said it was not actively trying to sell itself but would be willing to partner with a larger sector player. Advanced Micro Devices fell 3.5 percent after Microsoft suspended patches to guard against security threats for computers running AMD chipsets after complaints that the software updates froze their machines.

 

In Bond Markets Euro zone government bond yields rose on Tuesday, following a wave of new debt issuance’s from the bloc’s top-rated issuers and a rise in U.S. and Japanese yields. Ten-year U.S. Treasury yields hit a 10-month high and 20-to-40 year Japanese government bond (JGB) yields set one-month highs after the Bank of Japan (BoJ) trimmed the amount of its JGB purchases, fueling talk the central bank may wind back monetary stimulus this year. Germany, the Netherlands and Austria sold more than 3.5 billion euros ($4.2 billion) of bonds, receiving strong demand from investors. Euro zone bond yields were 2-5 basis points (bps) higher on the day, led by Italy. German 10-year bond yields were up 2.5 bps at 0.45 percent, well above the mid-December level of 0.30 percent.

 

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