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GLOBAL MARKETS-Catalan vote, ECB news weigh on euro; results buoy equities

Published 2017-10-27, 11:39 a/m
GLOBAL MARKETS-Catalan vote, ECB news weigh on euro; results buoy equities
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* Catalan parliament vote weighs on euro, Spanish IBEX

* Wall Street up on robust earnings, Fed chair report

* U.S. Treasury yields lower (Updates to U.S. open, changes byline and dateline; previously London)

By Stephanie Kelly

NEW YORK, Oct 27 (Reuters) - The euro held near a three-month low against the U.S. dollar on Friday, undermined by the Catalan parliament's declaration of independence from Spain, while robust corporate earnings reports helped a broad advance in world equity markets.

The Catalan declaration, made after a secret ballot, is now likely to be ruled illegal by Spain's constitutional court. no doubt that Catalonia, the issue has been weighing on the euro," said Quincy Krosby, chief market strategist at Prudential Financial (NYSE:PRU) in New Jersey.

The euro had its worst day against the dollar in 16 months on Thursday after the European Central Bank said it would cut its bond purchases in half to 30 billion euros a month from January.

"That [the ECB meeting] was the seminal meeting for the euro for this week," Krosby said. "And then if you couple that with stronger U.S. data, that helps keep the euro weaker."

Stronger-than-expected U.S. third-quarter GDP data helped bolster the dollar. The U.S. economy grew at a three percent annual rate from July to September, showing resilience even as recent storms hurt consumer spending. dollar index .DXY , which measures the greenback against a basket of major currencies, rose 0.45 percent, with the euro EUR= down 0.63 percent to $1.1577.

Gains in the dollar were pared after a Bloomberg report that said U.S. President Donald Trump was leaning toward Federal Reserve Governor Jerome Powell as the next U.S. central bank chairman. Treasury note yields turned lower, following the Catalan news and Bloomberg report on Trump's possible Fed chief pick. 10-year notes US10YT=RR last rose 9/32 in price to yield 2.4228 percent, from 2.454 percent late on Thursday.

The 30-year bond US30YT=RR last rose 16/32 in price to yield 2.9356 percent, from 2.961 percent late on Thursday.

Gold edged higher on Friday, reversing earlier losses after the Catalonian parliament's independence declaration from Spain led investors to seek safety from political upheaval. Spot gold XAU= added 0.4 percent to $1,271.14 an ounce.

EARNINGS

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.37 percent.

On Wall Street, gains were led by robust technology earnings and third-quarter GDP growth that lifted investor sentiment. is driving the positive sentiment at the open," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. "Certainly a lot of enthusiasm for tech stocks that have reported."

The Dow Jones Industrial Average .DJI rose 27.48 points, or 0.12 percent, to 23,428.34, the S&P 500 .SPX gained 17.6 points, or 0.69 percent, to 2,578 and the Nasdaq Composite .IXIC added 117.37 points, or 1.79 percent, to 6,674.14.

Healthy results helped Amazon AMZN.O jump 11.8 percent while Google-parent Alphabet GOOGL.O gained 6.0 percent and Microsoft MSFT.O advanced 7.2 percent That drove the S&P technology index .SPLRCT up about 2 percent. The sector has surged about 30 percent this year, twice the advance in the broader S&P index.

Chevron (NYSE:CVX) CVX.N weighed on the Dow, with its shares dropping 1.9 percent after profit missed estimates. IBEX .IBEX hit session lows after the Catalan parliament declared independence, last dropping 1.5 percent. Europe's STOXX 600 .STOXX also cut gains after the vote, but remained up 0.6 percent. pan-European FTSEurofirst 300 index .FTEU3 rose 0.59 percent. European shares hit a five-month high on Friday, helped by strong earnings and the sharp drop in the euro. broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.18 percent higher, while Japan's Nikkei .N225 rose 1.24 percent.

Oil prices rose more 1 percent on support among the world's top producers for extending a deal to cut output and as the dollar retreated from three-month peaks.

U.S. crude CLcv1 rose 2.03 percent to $53.71 per barrel and Brent LCOcv1 was last at $60.21, up 1.53 percent on the day.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global assets in 2017

http://reut.rs/1WAiOSC Global currencies vs. dollar

http://tmsnrt.rs/2egbfVh Global bonds dashboard

http://tmsnrt.rs/2fPTds0 Emerging markets in 2017

http://tmsnrt.rs/2ihRugV

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