Treasuries, European Stocks Fall With Oil as Dollar Gains By David Yong & Stephen Kirkland - 2013-11-12T10:14:36Z Treasuries declined, sending 10-year yields to a two-month high, European stocks fell and the dollar strengthened. Oil led commodities lower, gold dropped for a fourth day and the pound weakened. Yields on 10-year Treasuries climbed four basis points to 2.79 percent at 10:05 a.m. in London. The Stoxx Europe 600 Index fell 0.5 percent to 322.01. Standard & Poor’s 500 Index (SPX) futures dropped 0.2 percent. The dollar approached 100 yen for the first time since Sept. 11, rising against all but one of its 16 major peers. The pound weakened 0.8 percent to $1.5863 after U.K. inflation slowed more than forecast. West Texas Intermediate crude retreated 0.7 percent, gold lost 0.2 percent and copper declined 0.4 percent. The dollar has climbed 1.6 percent versus the yen in the past three trading days as better-than-forecast U.S. jobs data fueled speculation the Federal Reserve will trim stimulus earlier than expected. The Bloomberg U.S. Financial Conditions Index, which combines everything from money-market rates to yields (USGG10YR) on government and corporate bonds to equity volatility, reached an all-time high. President Xi Jinping and Chinese Communist Party leaders conclude a gathering today to map out reforms for the world’s second-biggest economy. “People in the market seem to be convinced that the Fed’s tapering will happen sooner rather than later and that’s showing in long-dated Treasury yields,” said Peter Osler, head of interest-rates strategy at broker Marex Spectron Group Ltd. in London. “Economic reports suggested that, unlike in Europe, economic recovery in the U.S. is more solid.” Accommodation Riskier Dallas Fed President Richard Fisher, who has said he wouldn’t rule out backing a reduction in bond buying by March, said in a speech in Melbourne today that monetary accommodation “becomes riskier by the day.” His Atlanta and Minneapolis counterparts Dennis Lockhart and Narayana Kocherlakota are also scheduled to speak today. The dollar appreciated 0.5 percent to 99.66 yen after reaching 99.80 yen, the highest level since Sept. 13. It strengthened 0.1 percent to $1.3389 per euro, while the 17-nation shared currency advanced 0.4 percent to 133.45 yen. Germany’s 10-year bund yield rose three basis points to 1.78 percent, the highest since Oct. 23. The rate on similar-maturity Italian debt increased three basis points to 4.16 percent. Basic-resource companies and banks posted the biggest losses in the Stoxx 600, which has climbed 15 percent this year and closed yesterday at the highest since May 2008. Norsk Hydro Norsk Hydro ASA slumped 5.8 percent, the most in a year, after Vale SA sold a stake in the aluminum maker. Infineon Technologies AG dropped 4.4 percent after Europe’s second-largest semiconductor maker predicted a decline in profitability. Swiss Life Holding AG (SLHN) rallied 5 percent to a five-year high as Switzerland’s biggest life insurer reported increased sales and named a new chief executive officer. S&P 500 futures dropped after the U.S. benchmark index advanced 0.1 percent yesterday to 1,771.89, near its Oct. 29 record of 1,771.95. News Corp. (NWS) slid 3.3 percent in Sydney trading as the publisher of the Wall Street Journal reported a 2.8 percent decline in first-quarter revenue. Emerging Markets The MSCI Emerging Markets Index fell for a ninth day, the longest losing streak in seven years. Indonesia’s Jakarta Composite Index sank 1.2 percent after the central bank unexpectedly raised interest rates. Benchmark gauges in Turkey, the Czech Republic and India slid at least 0.9 percent, with the rupee leading currencies lower. China’s Shanghai Composite Index climbed 0.8 percent while the Hang Seng Index in Hong Kong retreated 0.2 percent. “The market is waiting for news from the plenary meeting to see if coming policies will exceed expectations,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “The rebound might be short lived unless trading volumes increase. WTI dropped to $94.48 a barrel and Brent declined 0.3 percent to $106.06 a barrel. The S&P GSCI of 24 raw materials slipped 0.2 percent. Gold fell to $1,280.13 an ounce and silver slipped 1 percent to $21.15 an ounce. U.S. natural gas gained 0.2 percent, the sixth consecutive advance and the longest streak since October 2012. -Bloomberg
Posted on: Tue, 12 Nov 2013 10:45:39 +0000
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