BLBG:Dollar Gains Before Housing Data As Stocks Fluctuate
The dollar strengthened before a report that will probably show the U.S. housing market is stabilizing. U.S. stock-index futures and European equities were little changed, while emerging-market shares fell for a second day as foreign investment in China dropped to a two-year low.
The dollar appreciated against most of its 16 major peers, gaining 0.4 percent versus the yen at 7:25 a.m. in New York. The pound rallied after U.K. retail sales unexpectedly rose. Standard & Poor’s 500 Index futures added 0.2 percent. The Stoxx Europe 600 Index (SXXP) slipped less than 0.1 percent, with the number of shares changing hands 27 percent lower than the 30-day average. The MSCI Emerging Markets Index (MXEF) fell 0.1 percent. Wheat jumped 1.7 percent.
New home construction in the U.S. probably held near a four-year high, economists said before the Commerce Department report today. Federal Reserve Bank of Dallas President Richard Fisher said yesterday the economy probably won’t lapse into a recession in 2013 and that new stimulus won’t spur growth. China reported foreign direct investment fell for the eighth time in nine months, while a person familiar with the matter said Spain is about to get an emergency disbursement from a 100 billion- euro ($123 billion) bailout package.
“We’re bullish on the dollar,” Lee Hardman, a foreign- exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd., said in an interview. “We are anticipating the crisis in Europe will further escalate and not convinced by the so-called plans to ease the debt crisis. I don’t think the Fed is in a rush to implement” more stimulus, he said.
The yen weakened against all 16 major counterparts, and euro declined 0.1 percent to $1.2282.
Pound Gains
The pound strengthened 0.1 percent against the dollar after weakening as much as 0.3 percent. Retail sales including auto fuel gained 0.3 percent in July, compared with a 0.1 percent decline predicted by the media estimate of 22 economists in a Bloomberg survey.
The yield on Spain’s 10-year bonds fell for a fourth day, losing three basis points to 6.61 percent. The rate on benchmark German bunds dropped two basis points to 1.55 percent, while the yield on similar-maturity Italian bonds rose eight basis points.
European telecommunications companies posted the biggest drop of the 19 industries in the Stoxx 600 as Telekom Austria NV tumbled 5.1 percent. The phone company that is partly owned by Carlos Slim’s America Movil SAB cut its profit and sales forecast for 2012. Novozymes A/S (NZYMB) jumped 2.5 percent after reporting second-quarter net income that exceeded analysts’ estimates.
Housing Starts
The gain in U.S. index futures indicated the S&P 500 will extend yesterday 0.1 percent advance. Builders broke ground on 756,000 houses at an annual rate, according to the median estimate of 79 economists surveyed by Bloomberg News. June’s 760,000 pace was the highest since October 2008.
Other reports may show manufacturing in the Philadelphia area shrank in August and claims for unemployment benefits were little changed last week.
Cisco Systems Inc. (CSCO) surged 5.5 percent in pre-market trading as the biggest maker of computer-networking equipment reported quarterly profit and sales that beat analysts’ projections. Wal- Mart Stores Inc. dropped 2.7 percent. The company reported second-quarter earnings per share of $1.18, compared with $1.17 in a Bloomberg survey of analysts.
Wheat gained for a second day on speculation that demand will increase for U.S. and European grains as dry weather reduces supplies in Russia. Farmers in Russia, the world’s third biggest wheat exporter last season, have harvested 27.9 million metric tons of the grain so far this year, 17 percent less than in 2011, as yields declined, the country’s Agriculture Ministry said today.
Arabica coffee was down the most, at 1 percent, and zinc declined 0.7 percent. Copper rose 0.3 percent in London.
The Shanghai Composite Index slid 0.3 percent after the smallest inflow of foreign direct investment since July 2010. India’s Sensex lost 0.4 percent, while Russia’s Micex Index added less than 0.1 percent.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jason Clenfield in Tokyo at jclenfield@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
