European Shares Struggle; Oil Holds Weekly Loss: Markets Wrap: Bloomberg

  • U.K. stocks fall as pound gains one year after Brexit vote
  • Dollar gains a Fed speakers maintain rate-outlook path

European equities slipped, extending the longest run of weekly losses in a year as U.K.-listed stocks struggled on the anniversary of Britain’s vote to leave the European Union. Oil was poised for a fifth week of decline as a supply glut shows no sign of ending.

The benchmark Stoxx Europe 600 gauge dropped for a third week, with food and beverage companies leading declines after Stifel Financial Corp. downgraded brewer Heineken NV’s stock. Shares in the U.K. were were set for a fourth day of losses, while the pound pared its weekly decline with Brexit negotiations under way. The dollar headed for a weekly gain after Federal Reserve speakers did little to alter projections for the path of interest rates.

Read more about British markets one year after the Brexit vote

Weakness in energy prices were the theme of the week, with oil in New York and London dropping into a bear market on concerns that expanding supply in the U.S. and Libya will counter output cuts from the Organization of Petroleum Exporting Countries. In Europe, the battle lines over negotiations to untangle Britain from the region have been drawn, with residency rights and clearing of euro-denominated financial instruments among the first issues making headlines.

Read our Markets Live blog here.

Here are some upcoming events investors are watching:

  • James Bullard, Loretta Mester and Jerome Powell cap a busy week for speeches from Fed policy makers. Bullard told the Wall Street Journal the rate trajectory the FOMC has laid out seems “unnecessarily aggressive” and the balance-sheet unwind should start sooner rather than later.
  • Friday’s session in the U.S. will probably be one of the busiest of the year for equity traders as the annual Russell reshuffle is set to take effect. The FTSE Russell’s rebalancing of stock indexes reliably boosts trading, though it rarely triggers big price swings in the market.
  • U.K. Prime Minister Theresa May will make a statement to the British parliament on Monday when details of her proposal to safeguard the residency rights of European citizen who currently live in the U.K. will be published by the government.

Here are the main moves in markets:

Stocks

  • The Stoxx Europe 600 Index slipped 0.1 percent as of 10:13 a.m. in London.
  • The FTSE 100 Index was down 0.3 percent on Friday, heading for a 0.6 percent weekly decline.
  • The MSCI Asia Pacific Index rose 0.2 percent.
  • Futures on the S&P 500 Index rose 0.1 percent. The underlying gauge fell less than 0.1 percent on Thursday.

Commodities

  • West Texas Intermediate crude rose 0.4 percent to $42.94 a barrel. Oil rose 0.5 percent on Thursday, stabilizing after falling into a bear market earlier in the week. Futures are down 4.5 percent for the week.
  • Gold rose 0.5 percent to $1,256.77 an ounce, for a third day of gains.

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2 percent. It’s still up 0.3 percent for the week, after rallying Monday and Tuesday on Fed rate-hike expectations.
  • The pound rose 0.4 percent to $1.2734, paring drop this week to 0.4 percent. The euro rose 0.2 percent to $1.1169.
  • The yen rose less than 0.1 percent to 111.27 per dollar.

Bonds

  • The yield on 10-year Treasuries rose one basis point to 2.16 percent.
  • U.K. 10-year gilt yields rose two basis points to 1.04 percent, led by losses in shorter-dated securities as U.K. money markets push odds of a rate hike by the end of 2017 over sixty percent.

By Eddie Van Der Walt and Adam Haigh

June 23, 2017, 7:19 PM GMT+10

Source: Bloomberg

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