Close July 16
In European Equity Markets the pan-European Stoxx 600 rose by almost half a percent in afternoon trade, with construction and material stocks, up 1.5%, leading the gains. Shares of Swedish power tools giant Husqvarna fell 6% to the bottom of the European blue chip index after its CEO said its full-year 2019 operating margin would be at the lower end of the previous guidance range due to weak sales early in the second quarter. Fiat Chrysler stock was down 2.7% during afternoon trade after it was initiated at a “sell” rating by Goldman Sachs.
In Currency Markets sterling fell to a 27-month low against the dollar on Tuesday and hit new six-month lows versus the euro, extending losses as the two candidates to be Britain’s next prime minister vied to outgun each other on taking a harder Brexit stance. Sterling which already fell half a percent on Monday is now headed for its biggest one-day fall since March, after Boris Johnson and his rival to be Conservative Party leader, Jeremy Hunt, said late on Monday they would not accept the so-called Northern Irish backstop element of Theresa May’s Brexit deal.
In Commodities Markets oil prices steadied on Tuesday as a resumption of production in the Gulf of Mexico after Hurricane Barry and a boom in U.S. supply from shale oil countered tensions in the Middle East. Uncertainty about China’s economic prospects also pressured prices after data on Monday showed that growth in the country slowed to 6.2% from a year earlier, the weakest pace in at least 27 years. West Texas Intermediate crude futures rose by 13 cents to $59.71 a barrel. The U.S. benchmark hit a session high of $60.02 earlier.
In US Equity Markets indexes were flat on Tuesday as Wall Street’s big banks swung between gains and losses after their quarterly results drew mixed reactions from investors. JPMorgan, the largest U.S. bank by assets, beat profit estimates but interest margin slipped, triggering concerns of lower interest rates hurting bank profits, a day after Citigroup Inc. reported a similar decline. JPM shares were marginally higher in volatile trade after slipping as much as 1% during the session. The S&P banking index was down 0.23%.
In Bond Markets U.S. Treasury yields gained on Tuesday after data showed that U.S. retail sales increased more than expected in June, adding to recent evidence that the economy is improving. Benchmark 10-year notes fell 13/32 in price to yield 2.13%, up from 2.09% late on Monday. The Federal Reserve is seen as certain to cut rates when it meets later this month, even as the U.S. economic picture improves. Interest rate futures traders are pricing in a 73% chance of a 25 basis point cut and a 27% likelihood of a 50 basis point cut, according to the CME Group’s FedWatch tool.
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