In European Equity Markets weakness among tobacco stocks and some broker downgrades weighed on European shares, sending them lower on the final trading day of July as analysts dissected what was beginning to look like an “underwhelming” earnings season. The pan-European STOXX 600 index was down 0.1 percent while euro zone stocks and blue chips fell 0.3 to 0.4 percent. British tobacco firms Imperial Brands and British American Tobacco extended losses from the previous session, down 5.8 percent and 4.7 percent respectively following Friday’s sell-off after the U.S. Food and Drug Administration proposed cutting nicotine in cigarettes. Mining firms were a boost as copper prices rose on the back of manufacturing data from China.

In Currency Markets the U.S. dollar hit a 2-1/2-year low against the euro on Monday on month-end portfolio adjustments and expectations for a more hawkish European Central Bank, and touched a more than six-week low against the yen on concerns over low U.S. inflation. The euro rose as much as 0.4 percent against the dollar to $1.1797, its highest against the greenback since January 2015. The dollar also touched 110.32 yen, its lowest against the Japanese currency since June 15. The dollar gained against commodity currencies such as the Canadian, Australian and New Zealand dollars as a decrease in oil prices weighed on the currencies. The dollar was last up 0.5 percent against the Canadian dollar at $1.2498.

In Commodities Markets oil was flat near two-month highs on Monday, putting July on track to become the strongest month so far this year, as news of a producers’ meeting next week added to bullish sentiment driven by the threat of U.S. sanctions against OPEC-member Venezuela.  Benchmark Brent crude traded at $52.47 a barrel, down 5 cents from Friday’s close. U.S. light crude oil traded briefly above $50 per barrel for the first time in two months before easing back to around $49.53 a barrel. Spot gold was down 0.1 percent at $1,267.7 an ounce. Silver gained 1 percent to $16.83 an ounce, palladium rose 1.6 percent to $891.22 and platinum climbed 0.9 percent to $937.30. Copper rose 0.70 percent to $6,369.50 a ton, having risen as high as $6,430.

In US Equity Markets the S&P and the Nasdaq were trading lower on Monday morning as tech stocks weighed on the indexes, while the Dow touched a record high, boosted by Boeing Co. The Dow Jones industrial average was up 0.29 percent, at 21,893.85, the S&P 500 was down 0.055 percent, at 2,470.72 and the Nasdaq Composite was down 0.34 percent, at 6,352.90. Six of the 11 major S&P sectors were lower, with the information technology’s 2.3 percent decline, making it the biggest drag.  Shares of Boeing were up 2 percent, making it the top boost to the Dow, after J.P. Morgan analysts raised price target. Scripps Network was up 1.23 percent premarket after Discovery Communications said it would buy the media company for $14.6 billion.

In Bond Markets U.S. Treasury yields rose on Monday before a heavy week of data, which will culminate in Friday’s employment report for July. Benchmark 10-year notes were last down 4/32 in price to yield 2.30 percent, up from 2.29 percent on Friday. Southern European government bond yields fell on Monday as euro zone inflation for July remained well short of the European Central Bank target, thereby weakening the case for a rapid unwinding of monetary stimulus. Italian, Spanish and Portuguese bonds, seen as the biggest beneficiaries of central bank stimulus, outperformed the rest of the market, falling 3-7 basis points.

European Equity Upgrades/Downgrades

• SEVERN TRENT (SVT LN) RAISED TO OUTPERFORM FROM SECTOR PERFORM AT RBC
• WOLSELEY (WOS LN) RAISED TO OUTPERFORM FROM SECTOR PERFORM AT RBC
• BASF (BAS GY) RAISED TO HOLD FROM SELL AT BERENBERG
• CARREFOUR (CA FP) DOWNGRADED TO SELL FROM HOLD AT DEUTSCHE BANK
• DIA (DIA SM) DOWNGRADED TO UNDERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY
• JULIUS BAER (BAER VX) UPGRADED TO HOLD FROM REDUCE AT KEPLER CHEUVREUX
• GAS NATURAL (GAS SM) UPGRADED TO HOLD FROM REDUCE AT HSBC
• ROYAL MAIL GROUP (RMG LN) UPGRADED TO BUY FROM HOLD AT HSBC