17March > Closed Markets Review

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In European Equity Markets stocks fell on Thursday, led down by exporters as the euro strengthened against the dollar after the U.S. Federal Reserve flagged fewer rate rises this year than expected. The FTSEurofirst 300 index fell 1.1 percent. The STOXX Europe 600 Automobile and Parts index lost 2.5 percent, dragged down by a 2.9 to 3.6 percent fall in BMW, Daimler, Renault and Peugeot. The European Banks index also fell 2.6 percent following the Fed statement, with KBC, Deutsche Bank, Unicredit and Commerzbank falling 3.9 to 5.0 percent. Austria’s benchmark ATX lost 1.2 percent, hit by the fall in Immofinanz shares as well as a 16.7 percent fall in Vienna Insurance, whose results disappointed investors.

In Currency Markets the dollar fell against major currencies on Thursday, a day after the Federal Reserve pared back expectations for interest rate increases, while the yen was volatile on speculation the Bank of Japan was concerned about the Japanese currency’s strength. The dollar, which had earlier hit a low of 110.68 yen, rebounded and was last trading at 111.35 yen. Sterling made the biggest gains against the dollar on Thursday. Bolstered by the Bank of England’s decision to keep rates unchanged, the pound was last up 1.3 percent to $1.4445. The dollar hit 8-month lows against the Australian dollar and its weakest in a month against the euro, at $1.1342.

In Commodities Markets U.S. crude hit 2016 highs on Thursday as oil markets rallied for a second straight day on optimism major producers will strike an output freeze deal in Qatar next month amid rising gasoline demand in the United States. OPEC kingpin Saudi Arabia and non-OPEC producers led by Russia will meet on April 17 in the Qatar capital Doha, increasing the likelihood of the first global supply deal in 15 years. On Thursday, the front-month in U.S. crude’s WTI futures was up 3.5 percent, at $39.77 a barrel. Brent crude’s front-month rose 2.3 percent, to $41.27, after earlier reaching $41.44, four cents below the year’s peak. Copper prices briefly hit their highest since November, and were last up more than 2 percent.

In US Equity Markets the S&P 500 and the Dow edged up on Thursday as a rise in crude oil lifted the materials and energy stocks, a day after the Fed’s lowered projection of two interest rate hikes in 2016 pushed the S&P to its highest close this year. The S&P 500 was up 0.18 percent, at 2,030.92 and the Nasdaq Composite was down 0.18 percent, at 4,755.49. Endo International was down 8 percent after the drugmaker forecast first-quarter results below estimates. FedEx was up 8.4 percent after the package delivery company forecast better-than-expected full-year earnings. Office Depot was up 5 percent after a New York Post report that Amazon could be eyeing a stake in the office supplies retailer’s corporate business unit. Amazon was down 2.1 percent.

In Bond Markets U.S. Treasury debt yields fell for the fourth straight session on Thursday, a day after the Federal Reserve lowered its expectations for interest rate hikes this year and expressed concerns about the state of global financial markets. Benchmark 10-year note yields fell to one-week lows, while U.S. two-year notes, the maturity most sensitive to Fed rate expectations, slid to a two-week trough. The 30-year bond was last up more than a point in price, while yields fell to 2.676 percent from 2.710 percent late on Wednesday.

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