Thursday, 14 May, 2015
Dollar Weakens as Global Bond Rout Abates; European Stocks Fall
(Bloomberg) — The dollar slipped toward a four-month low versus major peers, while Treasuries halted their slide and European bonds fluctuated amid a selloff that’s wiped more than $400 billion from global markets. U.S. crude oil fell with European stocks. The Bloomberg Dollar Spot Index retreated 0.4 percent by 8:12 a.m. in London, as the euro climbed 0.6 percent and currencies from New Zealand to Norway advanced. Germany’s 10-year notes swung between gains and losses as yields on similar Treasuries fell two basis points. The Stoxx Europe 600 Index retreated 0.7 percent and Standard & Poor’s 500 Index futures fluctuated. Oil slipped 0.4 percent in New York. The U.S. currency is heading for a fifth straight weekly decline, the longest streak in 18 months. Data showing U.S. April retail sales stagnated was the latest disappointing report to cast doubt on whether world’s biggest economy is ready for higher interest rates. The U.S. will auction 30-year notes today, adding supply into volatile global debt markets. “What we’re seeing right now is some consolidation as the theme of cyclical and policy divergence that have been driving the dollar higher has lost momentum,” said Todd Elmer, a Singapore-based currency strategist at Citigroup Inc. The weaker-than-estimated retail sales data “reinforces a lot of the very benign thinking on the trajectory of U.S. policy and is probably going to see investors continue to push back their expectations on the timing of the Fed move.” Kiwi Gains The greenback was weaker against most major peers. The Bloomberg dollar gauge was at 1,151.28, on track for its lowest close since Jan. 21. The euro bought $1.1412, the most since Feb. 23, while the yen climbed 0.2 percent to 118.95 per dollar. The kiwi climbed a third day, rising to as high as 75.61 U.S. cents after retail sales expanded 2.7 percent in the first quarter, beating the 1.6 percent projected by economists. Norway’s krone advanced 0.4 percent. The Korean won, Thai baht and Malaysian ringgit all added at least 0.6 percent. India’s rupee climbed 0.2 percent as data showed wholesale prices fell more than estimated in April. Indonesian markets are closed for a holiday. German bunds, which have been at the epicenter of the month-long selloff in fixed-income, paid 0.724 percent at the end of Wednesday trading, 14 times the record low of 0.049 percent struck less than one month ago. Ten-year Japanese yields touched their highest since March Thursday before retreating to 0.445 percent. Rates on similar-maturity Australian bonds climbed to 3.02 percent, while yields on New Zealand and Singaporean notes rose at least three basis points. Treasuries Rise Yields on Treasuries due in a decade fell to 2.26 percent following last session’s four basis-point increase. The rate on 30-year notes retreated two basis points to 3.07 percent after surging seven basis points Wednesday. The U.S. plans to sell $16 billion of 30-year bonds Thursday. A sale of $24 billion of 10-year notes Wednesday attracted the most demand from investment funds and foreign central banks since 2011. Standard & Poor’s 500 Index futures were little changed after U.S. gauges swung between gains and losses Wednesday. All 19 groups on the Stoxx 600 retreated today. Europe’s benchmark gauge retreated a third straight day. The Hang Seng Index swung between gains and losses in Hong Kong. Tencent Holdings Ltd., Asia’s second-biggest Internet company, jumped after reporting record earnings. The Hang Seng China Enterprises Index, a gauge of mainland shares traded in the city, fell 1.1 percent. The Shanghai Composite Index finished 0.1 percent higher. West Texas Intermediate crude slipped to $60.27 a barrel after U.S. government data showed refineries reduced their oil use by the most in almost four months. Brent crude dropped 0.3 percent to $66.59 a barrel in London. 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.