Thursday, 21 May, 2015

Treasuries Rise, Dollar Slips as Data Show Uneven Economy Growth

(Bloomberg) — Treasuries rose while the dollar halted a three-day rally as economic data showing uneven growth did little to change investor views on the timing of interest-rate increases. U.S. stocks fluctuated and oil advanced. The Bloomberg Dollar Spot Index slipped 0.1 percent at 10:02 a.m. in New York, after surging 1.9 percent in three days. Treasury 10-year note yields fell three basis points to 2.22 percent, while the Standard & Poor’s 500 Index rose less than 0.1 percent. The Stoxx Europe 600 Index swung between gains and losses. Oil in New York jumped 1.1 percent. Purchases of previously owned homes unexpectedly fell in April, a sign the industry’s recovery remains uneven, while U.S. jobless claims over the past four weeks dropped to a 15-year low. Federal Reserve minutes on Wednesday signaled officials are unlikely to raise rates in June, while keeping open the option to tighten this year. “Investors in the U.S. are sitting on all-time highs,” said Christian Gattiker, head of research at Julius Baer Group Ltd. in Zurich. “The June rate hike was off the table a long time ago, but there’s some relief the Fed acknowledged this. It’s not good enough to drive markets much higher.” Fed officials last month didn’t expect to raise rates at their June meeting even as they concluded that a first-quarter economic slowdown was unlikely to persist, the minutes showed. Fed Chair Janet Yellen is due to give a speech Friday on the economic outlook. Seeking Direction The S&P 500 has ended little changed in the past two days after closing Monday at a record. The Dow Jones Industrial Average halted a four-day rally Wednesday after topping its all-time high. “It feels like we’re at point where market is desperately seeking direction,” said Yousef Abbasi, the global market strategist at JonesTrading Institutional Services LLC in New York. “The economic data is pointing to stymied levels of growth and unimpressive levels of inflation.” Deals boosted equities Thursday, as Omnicare Inc. rose after CVS Health Corp., the biggest U.S. retailer of prescription drugs, agreed to acquire nursing-home pharmacy for a total enterprise value of $12.7 billion. Earnings were mixed. Best Buy Co. jumped after posting profit that topped estimates. Salesforce.com Inc. climbed on a higher revenue forecast. NetApp Inc. sank after revenue and profit that missed estimates. ECB Minutes The dollar dropped versus all but one of its 16 major peers, weakening 0.6 percent to $1.1158 per euro and 0.8 percent to $1.5664 per British pound. Treasuries climbed for a second day, having risen on Wednesday after the Fed minutes. European Central Bank policy makers agreed on “firm implementation” of policy decisions, according to a summary of the April 14-15 meeting. The ECB’s quantitative-easing program is in its third month, with 122 billion euros ($136 billion) in public-sector bond purchases. Spanish and Italian bonds were little changed, paring earlier losses. The Stoxx 600 was little changed after three days of gains. Germany’s DAX Index dropped 0.1 percent. Automakers were among the biggest losers in the Stoxx 600 while commodity producers advanced. The MSCI Emerging Markets Index declined 0.5 percent. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong fell 0.9 percent, its first drop in three days. A preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was at 49.1 for May, trailing analysts’ estimates. The flash PMI fell short of the median estimate of 49.3 in a Bloomberg survey. Numbers below 50 indicate contraction. The Bloomberg Commodity Index gained 0.5 percent. Oil rose for a second day as U.S. crude stockpiles shrank, indicating the supply glut may be easing. West Texas Intermediate for July delivery gained to $59.88 a barrel in New York. Gold fell to a one-week low, with futures for June delivery sliding 0.5 percent to $1,202.20 an ounce. The metal touched $1,200.80, the lowest since May 13. Archr LLP is Authorised and regulated by the Financial Conduct Authority (FCA reference 617163). Archr LLP is not covered by the Financial Services Compensation Scheme (FSCS). Archr is registered in England and Wales No. OC371018. Registered office Chancery House, 30 St Johns Road, Woking, Surrey, GU21 7SA This message may contain confidential or privileged information. If you are not the intended recipient, please advise us immediately and delete this message. 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