Dollar Rally Rolls On as Oil Rebounds, Bonds Fall: Markets Wrap

Brendan McDermid („Reuters“ / „Scanpix“) nuotr.

The dollar rallied a fourth day, roiling emerging-markets and complicating the picture for commodities as traders digest President Donald Trump’s decision to walk away from a nuclear deal with Iran. Bonds fell before a key auction of Treasuries, while stocks were mixed as earnings rolled in.

Having erased its 2018 losses earlier this week, the greenback advanced against almost every major peer. The yield on 10-year Treasuries broke above 3 percent. The Stoxx Europe 600 Index edged upward after the MSCI Asia Pacific Index retreated, while U.S. futures were slightly higher. Emerging-market equities and currencies slipped amid the dollar strength and as West Texas crude recovered past $70 in New York. Most metals fell.

The threat of an increase in geopolitical tension in the Middle East is weighing on global sentiment just as concern spreads over the implications of higher Treasury yields and a stronger dollar. Wednesday brings with it a $25 billion auction of 10-year U.S. notes, with investors waiting to see if the new bonds will carry a 3 percent coupon for the first time in almost seven years.

Elsewhere, Indonesia’s rupiah fell to a fresh 29-month low on worries about capital outflows from emerging markets. Gold slumped.

Some key events coming up this week:

Malaysia holds a general election Wednesday. Japanese Prime Minister Shinzo Abe hosts South Korean President Moon Jae-in and Chinese Premier Li Keqiang on Wednesday. The Bank of England decides on policy Thursday. U.S. inflation data for April is due the same day.And these are the main moves in markets:

Stocks

The Stoxx Europe 600 Index rose 0.1 percent as of 8:14 a.m. London time, the highest in almost 14 weeks. Futures on the S&P 500 Index increased 0.1 percent, reaching the highest in almost two weeks on its fifth consecutive advance. The MSCI All-Country World Index declined 0.1 percent. The U.K.’s FTSE 100 Index rose 0.4 percent to the highest in more than 14 weeks. Germany’s DAX Index decreased 0.1 percent. The MSCI Emerging Market Index sank 0.2 percent. The MSCI Asia Pacific Index declined 0.4 percent, the largest drop in two weeks.

Currencies

The Bloomberg Dollar Spot Index climbed 0.3 percent to the highest in 19 weeks. The euro declined 0.3 percent to $1.1828, the weakest in more than 20 weeks. The British pound dipped 0.3 percent to $1.3507, the weakest in more than four months. The Japanese yen declined 0.5 percent to 109.73 per dollar, the weakest in a week on the largest drop in two weeks.

Bonds

The yield on 10-year Treasuries climbed three basis points to 3.00 percent, the highest in two weeks on the biggest increase in almost three weeks. Germany’s 10-year yield climbed one basis point to 0.58 percent, the highest in a week. Britain’s 10-year yield increased two basis points to 1.444 percent, the highest in almost two weeks.

Commodities

West Texas Intermediate crude jumped 2.9 percent to $71.06 a barrel, the highest in more than three years on the largest surge in three weeks. Copper decreased 0.5 percent to $3.04 a pound, the lowest in more than a week. Gold fell 0.7 percent to $1,305.72 an ounce, the weakest in a week on the largest fall in more than a week.

Komentarai