Commodities Fall as Dollar Strengthens; Asian Stocks Gain Oil led commodities lower, snapping a three-day gain, and the dollar strengthened. Asian stocks advanced and regional bonds fell after the 30-year Treasury yield approached a two-year high on signs of faster U.S. growth. Brent crude fell 0.6 percent as of 2:28 p.m. in Tokyo and the Standard & Poor’s GSCI Spot Index of 24 commodities slid 0.4 percent. The Bloomberg Dollar Index rose 0.1 percent, extending this week’s advance to 1 percent. South Korea’s won slid 0.4 percent versus the greenback. The MSCI Asia Pacific Index added 0.2 percent. Australia’s 10-year bond yield climbed to a one-month high after the 30-year Treasury yield increased 13 basis points in the last two days to 3.76 percent. Futures on the FTSE 100 Index gained before a report that is forecast to show the euro-zone economy expanded for the first time in more than a year. U.S. crude stockpiles rose less than economists predicted last week and gasoline inventories climbed, according to figures released yesterday. U.S. retail sales grew for a fourth month in July, fueling speculation the Federal Reserve will rein in a bond-buying program. “The U.S. economic recovery is on track and the market is pricing in a tapering of asset purchases in September,” said Kikuko Takeda, a senior analyst at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. “The dollar may emerge out of its multi-year weakening trend this year as the Fed normalizes monetary policy.” The S&P GSCI index retreated from a one-week high as aluminum prices slid 0.3 percent, wheat dropped to a one-year low and West Texas Intermediate fell 0.4 percent to $106.45 a barrel. American Petroleum Institute figures showed U.S. crude inventories shrank by 999,000 barrels in the week ended Aug. 9, less than the decline of 1.5 million barrels forecast in a Bloomberg survey. The Bloomberg Dollar Index, which tracks the greenback against 10 major currencies, was headed for its highest close in a week. India’s rupee fell 0.5 percent, approaching a record low, and Malaysia’s ringgit touched the weakest level in three years. Australia’s currency weakened 0.2 percent to 91.05 U.S. cents and New Zealand’s was 0.2 percent stronger at 79.83. New Zealand’s core retail sales, which exclude fuel and vehicles, increased 2.3 percent in the second quarter, the most since 2006, data showed today. Australia’s 10-year bond yield rose nine basis points to 3.84 percent, while South Korea’s increased seven basis points to 3.62 percent. The yield on similar-maturity U.S. Treasuries fell to 2.70 percent, after rising 10 basis points yesterday to 2.72 percent. Sixty-five percent of economists in a Bloomberg survey said Federal Reserve Chairman Ben S. Bernanke will probably reduce the central bank’s $85 billion in monthly bond purchases in September. The Federal Open Market Committee’s first step will probably be small, with monthly purchases tapered by $10 billion to a $75 billion pace, according to the median estimate in a survey of 48 economists conducted Aug. 9-13. The Fed will end the buying by the middle of 2014, they predicted. Euro-area gross domestic product probably grew 0.2 percent in the second quarter from the previous three months, after six straight quarters of contraction, another survey showed before data today. The European Central Bank left its key interest rate unchanged this month at 0.5 percent. A storm shut markets in Hong Kong today. Japan’s Topix Index climbed 1.1 percent and Australia’s S&P/ASX 200 Index declined 0.1 percent, while South Korea’s Kospi index added 0.5 percent. China’s Shanghai Composite Index rose 0.3 percent. About 50 percent of companies on the MSCI Asia Pacific gauge that have posted profits this earnings season beat analysts’ estimates, data compiled by Bloomberg show. The cost of insuring corporate and sovereign bonds from non-payment in the Asia-Pacific region fell, according to credit-default swap traders. The Markit iTraxx Australia index decreased two basis points to 114 basis points, according to National Australia Bank Ltd. prices. The benchmark is on track to close at its lowest level since July 22, according to data provider CMA.
Posted on: Wed, 14 Aug 2013 06:28:08 +0000
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