In European Equity Markets the pan-European Stoxx 600 was 0.4% lower at the closing bell, with almost every sector and all major bourses in negative territory. Basic resources, a sector heavily exposed to China, fell 1.5% to lead losses, while autos stocks bucked the trend to end the session above the flatline. In corporate news, Thyssenkrupp on Thursday reported a widening full-year net loss for fiscal 2019 and downgraded its 2020 outlook. The German giant’s stock declined 14% by the end of the session. Royal Mail stock fell 14% after its first-half earnings report, with the British postal near-monopoly seen to have fallen behind on its turnaround plan.
In Currency Markets the pound struggled to break through the $1.30-mark yet again on Thursday, as a rebound in the dollar and an election manifesto from the opposition Labour Party that fuelled some profit-taking on the British currency. In its fourth attempt to break through $1.30 in nearly two months, the pound struggled to gain momentum as investors moved to the sidelines before the Dec. 12 election. Labour leader Jeremy Corbyn unveiled his party’s election manifesto on Thursday, setting out radical plans to transform Britain with public sector pay rises, higher taxes on companies and a sweeping nationalisation of infrastructure. The pound edged 0.1% lower.
In Commodities Markets oil prices rose nearly 2% on Thursday following a Reuters report that OPEC and its allies are likely to extend output cuts until mid-2020, while fresh signs emerged that China had invited U.S. trade negotiators for a new round of talks. Brent crude was up 97 cents, or 1.6%, at $63.37 a barrel, while WTI crude rose 98 cents, or 1.7%, to $57.99. U.S. crude futures touched a session high of $58.28 a barrel and Brent climbed to a high of $63.78, both the highest since Sept. 24. To support oil prices, the Organization of the Petroleum Exporting Countries and its allies are likely to extend output cuts to June when they meet next month, according to OPEC sources.
In US Equity Markets the three major U.S. indexes fell on Thursday after conflicting headlines on U.S-China trade relations and a row between the world’s top two economies over the Hong Kong protest led to uncertainty over the timing of a deal to end the dispute. The S&P 500 fell 0.3%, at 3,098.82. The Nasdaq Composite declined 0.3%, at 8,502.89. Tiffany & Co gained 2.8% as Reuters reported LVMH persuaded the jewelry chain to allow it to access its books after the French luxury group raised its bid to about $16 billion. Macy’s Inc fell 2.4% after the department store operator cut its full-year profit forecast, blaming weak international tourism and sluggish mall traffic.
In Bond Markets benchmark German bond yields ended a three-day falling streak and nudged higher on Thursday as investors took profits after a rally, although concern over whether the United States and China would sign a trade deal this year capped the spike in yields. Yields were broadly higher across the euro-area following slightly higher U.S. Treasury yields overnight. German 10-year bond yields, widely seen as a benchmark in the euro area, rose nearly 2 bps to -0.3340%, rising above a three-week low of -0.3840% hit on Wednesday. An overnight rise in the ESTR rate, the eurozone’s new benchmark interest rate, also weighed on sentiment.