Close July 17

In European Equity Markets the pan-European Stoxx 600 traded 0.36% lower during the session, with oil and gas stocks slipping almost 2% but food and beverage stocks clawing a 0.5% rise. Meanwhile, earnings are also in focus for investors. In Europe, Swedish Orphan Biovitrum shares rallied 10% after the company forecast full-year profit and sales growth. Shares of Swiss watchmaker Swatch Group climbed 5% after it issued guidance for strong growth ahead despite a fall in first-half profits.


In Currency Markets sterling fell below $1.24 on Wednesday, levels not plumbed for more than two years, as investors continued to price the growing risk of Britain’s crashing out of the European Union without a transition agreement in place. After falling to as low as $1.2382, the pound later rebounded slightly on Wednesday to trade at $1.2426, up 0.2% on the day, but the currency remains under pressure. The pound has lost 1% against the euro this month and more than 2% against the dollar, putting it on track for its biggest monthly drop since June 2018.


In Commodities Markets U.S. crude oil stockpiles fell more than expected last week, while gasoline and distillate inventories rose sharply, the Energy Information Administration said on Wednesday, due to the impact of the first major hurricane to hit the U.S. Gulf of Mexico this season. Crude and gasoline futures turned lower after the report. U.S. crude fell 39 cents per barrel to trade at $57.24 a barrel, while gasoline futures traded down 0.45 cent to $1.8867 a gallon. Crude inventories fell by 3.1 million barrels last week, more than analysts’ expectations for a decrease of 2.7 million barrels.


In US Equity Markets stocks were flat on Wednesday as trade-related weakness hurt CSX Corp’s profit, leading to a decline in railroad stocks and offsetting gains in shares of Abbott and Qualcomm. Shares of CSX recorded the steepest fall on the benchmark index, sliding 8.3% after the company posted lower-than-expected quarterly profit and cut its full-year revenue forecast. Rivals Union Pacific Corp fell 5.3% and Kansas City Southern declined 4%. Both companies will report results this week.


In Bond Markets Euro area government bond yields tumbled on Wednesday after U.S. Federal Reserve officials reinforced expectations they would cut interest rates this month and suggested they are debating how deep that cut should be. Italy’s 10-year bond yield fell to its lowest since late 2016 at 1.57%, before settling at around 1.59% by the close. Most other euro zone bond yields were also heading back towards recent record lows. Across the euro zone, 10-year bond yields were down 3-6 bps, with German Bund yields at minus 0.29%.