BLBG:U.S. Stock Futures Rise As Dollar Falls Before Fed Report
U.S. stock-index futures rose and the dollar weakened before a Federal Reserve report that will detail last month’s decision to extend stimulus efforts. European shares erased declines and oil led commodities higher.
Standard & Poor’s 500 Index futures climbed 0.4 percent at 6:50 a.m. in New York, indicating the benchmark equity gauge will snap a four-day slump. The Stoxx Europe 600 Index (SXXP) added 0.1 percent, after losing as much as 0.6 percent. The Dollar Index (DXY) declined 0.3 percent. Spain’s bonds gained for a second day. The S&P GSCI gauge of 24 raw materials advanced 0.8 percent, with oil rising 1.5 percent in New York. Corn gained before a U.S. government crop report.
The Fed will release minutes of its June meeting when it extended the maturities of assets on its balance sheet and said it stood ready to take further action. Spanish Prime Minister Mariano Rajoy said today the government will take more measures amounting to 65 billion euros ($79.9 billion) to shore up the budget, while Germany’s top court said a decision to suspend legislation for the euro bloc’s bailout fund and fiscal treaty may take months rather than weeks.
“There could be some suggestion that the Fed is ready to ease as early as the August meeting,” said Ankita Dudani, a foreign-exchange strategist at Royal Bank of Scotland Group Plc in London. “That will play negative for the dollar, purely on the back of more dollars in circulation.”
Inventories Slow
The four-day drop in S&P 500 was the longest slump in two months. Last’s month Fed meeting came before a report July 6 that showed U.S. employers added fewer workers than forecast in June and growth in private payrolls was the weakest in 10 months.
A Commerce Department report today will probably show wholesale inventories rose in May at a slower pace than the prior month as businesses kept stockpiles lean, based on the median of 29 estimates in Bloomberg survey of economists. Another report may indicate the trade deficit narrowed, according to a Bloomberg survey.
Three shares fell for every two that gained in the Stoxx 600. Burberry Group Plc slid 6.2 percent, the biggest drop in almost two months, after the U.K.’s largest luxury-goods company reported sales that missed estimates. Britvic Plc plunged 16 percent, the most in six years, after the maker of Robinsons fruit drinks said full-year results will be at the bottom end of analysts’ estimates.
The yield on Spain’s 10-year bond fell 10 basis points to 6.71 percent, while the rate on similar-maturity Italian securities slipped eight basis points to 5.87 percent.
German Auction
The yield on 10-year German bunds decreased one basis point to 1.31 percent as the government sold 4.15 billion euros of the securities at a record-low yield of 1.31 percent.
The dollar declined against 14 of its 16 major counterparts tracked by Bloomberg, losing 0.2 percent versus the yen and and 0.3 percent against the euro.
Corn climbed 0.7 percent before the U.S. Department of Agriculture’s report on potential crop damage from the worst drought since Ronald Reagan was U.S. president. Corn jumped 14 percent last month. Oil in New York rose to $85.05 a barrel today and copper gained 0.5 percent.
The MSCI Emerging Markets Index fell 0.2 percent, retreating for a sixth day in the longest run of declines since May. Russia’s Micex Index retreated 1.2 percent, and India’s Sensex slipped 0.5 percent. The Shanghai Composite Index rose 0.5 percent. The Turkish lira strengthened for a second day after the current-account deficit narrowed for a seventh month, more than economists estimated.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Richard Frost in Hong Kong at rfrost4@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
