International Finance, Closing Wrap – Friday, November 22, 2019

In European Equity Markets the pan-European Stoxx 600 was 0.4% higher at the closing bell, with positive news on the trade war outweighing weak economic data out of the euro zone. Basic resources stocks added 1.8% to lead gains as most sectors and major bourses advanced. In terms of individual stocks, Umicore stock fell 4%, while Johnson Matthey fell 4.7% after price target cuts from UBS and Deutsche Bank. Edenred declined 2.4% after the British payment solutions provider announced that it had suffered a malware infection. Luxembourg steel giant Arcelormittal gained 6.6% while shares of satellite maker SES added 1.5%.

In Currency Markets the pound weakened on Friday and is set for its biggest daily loss in nearly three weeks after surveys showed British business suffering its deepest downturn since mid-2016, with caution rising before a Dec. 12 general election. The first “flash” reading of the IHS Markit/CIPS UK Purchasing Managers’ Indexes (PMI) for Britain showed that declines in both the services and manufacturing sectors quickened in November. Versus the dollar, the pound fell nearly 0.5% to $1.2840, its biggest loss since Nov. 4. Against the euro, the British currency slipped 0.3% to 85.95 pence.

In Commodities Markets oil prices held near two-month highs on Friday, set for a third consecutive week of gains on expectations of an extension to OPEC+ production cuts, though concern over U.S.-China trade talks continue to hang over the market. Brent crude futures eased 13 cents to $63.84 a barrel and West Texas Intermediate (WTI) crude futures fell by 26 cents to $58.32. Prices touched their highest since late September on Thursday after Reuters reported that the Organization of the Petroleum Exporting Countries (OPEC) and Russia are likely to extend existing production cuts by another three months to mid-2020 when they meet over Dec. 5-6.

In US Equity Markets the S&P 500 and Dow Jones indexes eked out gains on Friday after President Donald Trump signalled an imminent trade deal with China, while the Nasdaq was weighed down by a slump in shares of Tesla after the launch of its electric pickup truck. The S&P 500 was up 0.05%, at 3,105.13. The Nasdaq Composite was down 0.12%, at 8,496.13, dragged by a 7% decline in shares of Tesla Inc as its electric pickup truck design received an underwhelming response. Among other stocks, Nordstrom Inc jumped 8.8% after the retailer raised its 2019 forecast and reported third-quarter profit above expectations.

In Bond Markets most euro zone government bond yields fell on Friday after data showed euro zone business growth almost ground to a halt this month while activity in the dominant services industry rose at a much weaker pace than expected. Safe-haven German government bond yields had their biggest daily fall in over a week. Germany’s benchmark 10-year bond yields saw their biggest decline in over a week and were last down 3.7 bps at -0.361% , nearing almost three-week lows hit earlier this week. Elsewhere, in southern Europe, borrowing costs on the other hand increased slightly, with Italy’s 10-year bond yield up 1.3 bps at 1.295%.

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