As London/European traders head home for the weekend, the major European indices are closing higher on the day. However, Friday’s gains were not enough to erase the weekly declines for most of the markets. Italy’s FTSE MIB and France’s CAC led the losses, while the UK’s FTSE 100 bucked the trend.
The closing levels and changes for Friday showed:
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Germany’s DAX: 25,087.28, up 280.30 points or 1.13%.
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France’s CAC: 7,803.34, up 73.64 points or 0.95%.
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UK’s FTSE 100: 10,552.04, up 110.45 points or 1.06%.
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Spain’s IBEX: 19,033.10, up 104.20 points or 0.55%.
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Italy’s FTSE MIB: 49,746.30, up 448.41 points or 0.91%.
For the trading week:
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Germany’s DAX: -0.57%.
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France’s CAC: -1.19%.
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UK’s FTSE 100: +0.86%.
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Spain’s IBEX: -0.27%.
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Italy’s FTSE MIB: -1.46%.
France’s unrest remains a concern
France faced another week of student protests over teacher shortages, overcrowded classrooms and deteriorating school facilities. Thursday’s demonstrations drew 71,500 participants nationwide, according to the Interior Ministry. The main Paris march was mostly peaceful, but unrest elsewhere included arson, vandalism and attacks on teachers. The protests highlight the tension between demands for better public services and pressure on the government to reduce its debt and deficit.
On Friday, student unions vowed to continue despite the government’s pledge to send around 3,000 additional teachers into classrooms. Some 141 schools remained shut, with another nationwide school strike planned for Tuesday. For markets, the issue is how the government meets those demands while keeping spending under control.
European benchmark yields finish the week mixed
European 10-year yields were mixed on Friday. German, French and UK yields moved higher, while Spanish and Italian yields declined:
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Germany: 3.482%, up 2.4 basis points.
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France: 4.859%, up 3.9 basis points.
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UK: 5.447%, up 2.0 basis points.
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Spain: 4.103%, down 3.0 basis points.
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Italy: 4.574%, down 1.6 basis points.
For the week, the UK saw the largest increase in the benchmark 10 year yields:
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Germany: +2.0 basis points.
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France: -0.4 basis points.
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UK: +6.7 basis points.
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Spain: Unchanged.
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Italy: -3.5 basis points.
Despite the unrest, France’s benchmark yield ended the week marginally lower. Its yield nevertheless remains above those of Germany, Spain and Italy
The dollar gains against European currencies for the week
The weekly changes in the European currency pairs favored the dollar:
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EURUSD: Down 57 pips or 0.51%.
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GBPUSD: Down 9 pips or 0.07%.
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USDCHF: Up 18 pips or 0.22%.
The euro showed the largest decline of the three, while sterling was little changed.
At the European close on Friday, the dollar is mixed. It is higher against the Canadian dollar, yen, euro, pound and New Zealand dollar, but lower against the Australian dollar and Swiss franc. The largest moves are against the CAD, with USDCAD up 0.34%, and the AUD, with AUDUSD up 0.30%.
US yields rise, but metals and bitcoin advance
In the US as London/European traders head for the exits, the US Treasury yields are higher, with the larger increases at the shorter end of the curve:
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2-year: 4.8017%, up 4.57 basis points.
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5-year: 5.0283%, up 3.73 basis points.
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10-year: 5.2547%, up 2.17 basis points.
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30-year: 5.6116%, up 0.46 basis point.
The markets continue to price in a 19.4% chance for a rate hike in October.
Gold and silver are moving higher despite the rise in US yields. Bitcoin is also recovering, while crude oil is little changed:
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WTI crude oil: $91.59, up $0.10 or 0.11%.
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Spot gold: $4,188.69, up $55.00 or 1.33%.
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Silver: $60.78, up $1.60 or 2.71%.
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Copper: $6.6965, up 1.95%.
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Bitcoin: $82,665, up $928 or 1.14%.
Crude oil held support against the 100 hour MA on the dip today. That MA at the session lows was at $90.08. The low reached $90.01 before boucing.
Friday gave European stock buyers a better finish. For the week, however, most of the major indices still moved lower. The UK was the exception, while Italy and France had the most ground to recover.
This article was written by Greg Michalowski at investinglive.com.