Thursday, 14 May, 2015

Dollar Falls as S&P 500 Futures Rise While Treasuries Pare Gain

(Bloomberg) — The dollar slipped to the lowest level in almost four months against major peers, while European bonds extended a selloff that’s wiped more than $400 billion from global markets. Treasuries pared gains before a sale of 30-year bonds and U.S. equity-index futures advanced. The Bloomberg Dollar Spot Index retreated 0.3 percent at 7:24 a.m. in New York. The yield on 10-year German bunds rose four basis points to 0.76 percent while the rate on Treasuries fell one basis point to 2.28 percent. Standard & Poor’s 500 Index futures increased 0.4 percent while the Stoxx Europe 600 Index was little changed. Russia’s ruble weakened 1.5 percent as the central bank sold the currency for the first time since allowing it to trade freely in November. The dollar is heading for a fifth weekly decline, the longest streak since October 2013, amid signs the U.S. economy is struggling to gather strength, bolstering the case for keeping interest rates lower for longer. Retail sales stagnated in April, a Commerce Department report showed on Wednesday, before data today on jobless claims. The U.S. will sell 30-year bonds after its 10-year offering yesterday attracted the most demand from investment funds and foreign central banks since 2011. “It is really all about dollar weakness across the board today as markets are still digesting the U.S. retail sales data we saw yesterday,” said Keng Goh, a foreign-exchange strategist at Royal Bank of Canada in London. The central theme of the Federal Reserve increasing rates in September hasn’t yet changed but “no doubt some of the weakness in the data will probably diminish that conviction a little bit,” he said. Kiwi Gains The dollar fell 0.6 percent to $1.1419 per euro, the weakest level since Feb. 20. The yen was at 119.20 per dollar. The kiwi climbed for a third day, rising to as high as 75.61 U.S. cents after New Zealand’s retail sales expanded 2.7 percent in the first quarter, beating the 1.6 percent projected by economists. Yields on 30-year Treasuries retreated three basis points to 3.06 percent after surging seven basis points Wednesday. The U.S. plans to sell $16 billion of similar-maturity securities today. Commodity producers and automakers in the Stoxx 600 fell the most among 19 industry groups. Greece’s ASE Index advanced 1.2 percent, the best performance in western Europe. Ferragamo Slows Salvatore Ferragamo SpA, the Italian luxury-shoemaker, slid 4.7 percent after sales excluding currency swings rose at a slower pace than analysts had projected. Assicurazioni Generali SpA climbed 2.1 percent after Italy’s biggest insurer reported an increase in first-quarter profit. Kohl’s Corp. and Applied Materials Inc. are among four S&P 500 companies reporting earnings. The ruble declined for the first time in three days after reaching a five-month high. Russia’s dollar-denominated RTS Index slid 2 percent, after the highest close since October. While the Bank of Russia said foreign-exchange purchases, amounting to $100 million to $200 million daily, were meant to shore up international reserves, Citigroup Inc. said the move signaled that policy makers don’t want the ruble to strengthen past 50 per dollar. It closed below that level for the past two days. Emerging Markets The MSCI Emerging Markets Index slipped less than 0.1 percent. The Hang Seng China Enterprises gauge dropped for a third day, retreating 0.6 percent. The Shanghai Composite Index was little changed. Taiwan’s Taiex Index retreated 1.2 percent, halting a two-day advance. Oil was little changed as investors weighed the biggest drop in U.S. refiners’ use of oil in four months against a second weekly decline in crude stockpiles in the country. Refinery utilization slowed by 1.8 percentage points in the week ended May 8, while crude inventories contracted by 2.2 million barrels to 484.8 million, the U.S. Energy Information Administration said Wednesday. Nickel slid 1 percent, a second day of decline as stockpiles climbed near a record and the economies of China and the U.S., the world’s biggest metals consumers, showed signs of cooling. Inventories of the metal tracked by the London Metal Exchange rose to 441,042 metric tons, close to the record of 444,756 tons reached last month. Disclaimer The information contained in this communication from the sender is confidential. It is intended solely for use by the recipient and others authorized to receive it. If you are not the recipient, you are hereby notified that any disclosure, copying, distribution or taking action in relation of the contents of this information is strictly prohibited and may be unlawful. This email has been scanned for viruses and malware, and may have been automatically archived by Mimecast Ltd, an innovator in Software as a Service (SaaS) for business. Providing a safer and more useful place for your human generated data. Specializing in; Security, archiving and compliance. To find out more visit the Mimecast website.