Closing Market Wrap Dec 22, 2017: ‘ actiones secundum fidei’.

In European Equity Markets Spanish stocks fell after Catalan separatists won a slim majority in a regional election, deepening a political crisis which has hurt the economy and caused a business exodus from the region.

Spain’s IBEX fell 1.2 percent after voters backed separatist parties in a rebuke to Prime Minister Manuel Rajoy and European Union leaders.

Banco Sabadell and Caixabank, which have the biggest exposure to Catalonia and moved headquarters after October’s independence referendum, fell 2.7 to 3.4 percent, the top fallers.

Germany’s DAX edged down 0.1 percent, in line with France’s CAC 40.

As political risk reared its head again, financial stocks were the biggest drag on European markets. The euro zone banks index fell 0.8 percent.

In Currency Markets the euro fell against the dollar on Friday after Catalan separatists won a regional election, prompting worries about the possible break-up of the euro zone’s fourth-largest economy.

The euro slid 0.3 percent to $1.1835. Europe’s common currency though was still up nearly 13 percent so far this year, on track for its best yearly performance in 14 years.

The dollar was steady against the yen at 113.37. On Thursday, Bank of Japan Governor Haruhiko Kuroda reinforced expectations that the BOJ was in no hurry to move away from its ultra-loose monetary policy.

The dollar index, which measures the U.S. currency against a basket of six major rivals, was up 0.2 percent at 93.400.

In Commodities Markets  oil prices fell on Friday in light volumes but stayed near their highest levels since 2015 on pledges from OPEC leader Saudi Arabia and non-OPEC Russia that any exit from crude output cuts would be gradual.

Brent crude futures were down 3 cents at $64.87 a barrel, after ending Thursday at $64.90, its highest close since June 2015.

U.S. West Texas Intermediate crude futures were at $58.14 a barrel, down 22 cents.

Gold prices continued to hover near two-and-a-half week highs on Friday, despite a mild rebound in the greenback as trading volumes were expected remain subdued ahead of the Christmas holiday.

Gold futures edged up on quiet, low volume trade to 1,278.60 a troy ounce.

In US Equity Markets  the blue-chip Dow Jones index was lower in thin pre-holiday trading on Friday, pressured by losses in UnitedHealth and Nike.

The Dow was down 0.09 percent, at 24,759.84.

The S&P 500  was down 0.07 percent, at 2,682.57.

The Nasdaq Composite was down 0.11 percent, at 6,957.37.

Shares of UnitedHealth  were down 1.2 percent after the health insurer agreed to buy Chilean healthcare company Banmedica SA BAN.SN for $2.8 billion. Nike forecast muted current-quarter revenue growth that took a toll on its shares, which fell 3.1 percent.

Celgene shares fell 1.4 percent after the company’s follicular lymphoma regimen failed in a clinical trial.

In Bond Markets  Spanish government bond yields hit a one-month high in early trade on Friday after Catalan separatists looked set to regain power in a regional election, though the initial knee-jerk reaction was largely reversed as the session wore on. Spain’s 10-year borrowing costs rose 5 basis points to a one-month high of 1.52 percent in early trades, before falling back to 1.47 percent by the close.

Core euro zone government bonds opened slightly stronger on Friday, with the yield on Germany’s 10-year government bond, the benchmark for the region, edging marginally lower to 0.41 percent.

-R.W.N II

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