SF: Dollar Weakens as Stocks Advance With Treasuries; Metals Retreat
April 11 (Bloomberg) -- The dollar weakened against most major peers as investors bet global central-bank stimulus will bolster demand for higher-yielding assets. U.S. stocks rose for a fourth day and Treasuries gained while zinc, sugar and aluminum lost more than 1 percent to lead commodities lower.
The U.S. currency was lower against 14 of 16 major peers as of 10:02 a.m. in New York and the Dollar Index dropped 0.4 percent to trade near the lowest level in more than a month. The Standard & Poor’s 500 Index added 0.1 percent to 1,589.84 after yesterday capping its biggest three-day gain since the beginning of the year. European stocks rose for a fourth day. Italy’s 10-year yield rose four basis points to 4.35 percent, reversing earlier declines triggered when borrowing costs fell at an auction.
Bank of Japan chief Haruhiko Kuroda this week reiterated a pledge to do what’s needed to meet an inflation target of 2 percent in two years, bolstering speculation that central banks will keep markets awash in cash to bolster economies. Claims for U.S. jobless benefits declined by a more-than-forecast 42,000 to 346,000 last week, unwinding a surge caused by the Easter holiday and spring break at schools. The fewest number of Americans in five years rated the U.S. economy as “poor,” according to the Bloomberg Weekly Consumer Comfort Index.
Ashmore Assets
More than two shares gained for every one that declined in the Stoxx 600. Ashmore Group Plc, a U.K. fund manager that invests in emerging markets, rallied 13 percent today, the most in four years, as assets under management increased. Man Group Plc, the world’s largest publicly traded hedge-fund manager, jumped 8.2 percent after regulators cut the amount of capital it must hold.
Evraz Plc plunged 11 percent in London trading, the largest drop since 2011, as Russia’s biggest steelmaker said it will pay no final dividend for 2012 after a deterioration in performance in the second half.
The S&P 500 climbed 1.2 percent yesterday to a record as a report showed China’s imports grew faster than economists forecast in March and investors speculated earnings will beat estimates. The gauge has more than doubled from its 12-year low in March 2009, helped by the Federal Reserve’s unprecedented bond purchases and three straight years of profit growth.
Bed Bath & Beyond Inc. climbed after forecasting an increase in first-quarter sales. Microsoft Corp. fell after Goldman Sachs Group Inc. downgraded the shares. Yum! Brands Inc. slid after sales in China declined. Fortinet Inc. plunged as the provider of computer-network security reported results that missed some analyst estimates.
Italy Auction
Italy’s borrowing costs dropped at an auction of 7.17 billion euros ($9.38 billion) of bonds today as monetary easing by Japan prompted investors to search for better returns.
Italy sold 4 billion euros of a new 2016 bond at 2.29 percent, down from the 2.48 percent on similar-maturity debt March 13. Investors bid 1.4 times the amount of the three-year bond offered, up from 1.28 times last month.
The U.S. 10-year Treasury note yield fell one basis point to 1.79 percent, snapping a three-day drop. Economists are cutting their forecasts for how much yields will rise this year as the world’s largest economy shows signs of slowing. Ten-year yields will be 2.25 percent by Dec. 31, based on the average forecast among banks and securities companies surveyed by Bloomberg News from April 5 to April 9. The projection dropped from this year’s high of 2.32 percent in February, based on the monthly surveys.
Treasury Auction
The U.S. is scheduled to sell $13 billion of 30-year debt today in the last of this week’s three note and bond sales, which will total $66 billion.
Sweden’s krona strengthened 0.7 percent against the dollar after a report showed consumer prices were unchanged on an annual basis in March.
The yen strengthened 0.5 percent against the dollar after official data showed Japanese investors sold foreign bonds last week..
The New Zealand dollar climbed above 86 U.S. cents for the first time in 1 1/2 years after reports showed the nation’s manufacturing industry expanded last month and a gauge of home prices advanced to a record.
The MSCI Emerging Markets Index rose for a third day, advancing 0.4 percent. Turkey’s benchmark gauge climbed 2 percent after Moody’s Investors Service said a peace agreement with Kurdish militants would boost investment and enhance the country’s creditworthiness.
The won climbed 0.5 percent against the dollar and the Kospi index of stocks gained 0.7 percent. The Bank of Korea held the benchmark seven-day repurchase rate at 2.75 percent today. Eleven of 20 economists surveyed by Bloomberg News forecast a reduction as tensions with North Korea threaten to damp business and consumer sentiment.
--With assistance from Gan Yen Kuan in Kuala Lumpur, Sofia Horta e Costa, Claudia Carpenter, Paul Dobson, Abigail Moses and Andrew Rummer in London and Jae Hur in Tokyo. Editors: Jeff Sutherland, Michael P. Regan
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Michael P. Regan in New York at mregan12@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
