BLBG: Dollar Weakens as S&P 500 Index Futures Advance With Gold
The Bloomberg Dollar Spot Index headed for its lowest close this year while Standard & Poor’s Index futures rose and gold advanced before U.S. retail-sales and jobless-claims data. Copper fell after China’s industrial-output growth missed estimates.
The U.S. currency weakened 0.4 percent to $1.3952 per euro at 7:26 a.m. in New York and touched a more-than-two-year low of $1.3967. Standard & Poor’s 500 Index futures added 0.2 percent and the Stoxx Europe 600 Index swung between gains and losses. The Hang Seng China Enterprises Index dropped 0.4 percent after earlier rising 1.8 percent. Russian stocks, the world’s worst performers this year, slid as people with knowledge of the matter said the country was readying itself for Iran-style sanctions. Gold climbed to the highest price in almost six months while copper slipped 0.4 percent.
Stanley Fischer, nominee to be Federal Reserve Chair Janet Yellen’s deputy, said the U.S. economy still needs stimulus to combat unemployment before a report projected to show jobless claims increased last week. China’s industrial output expanded 8.6 percent through January and February, less than the 9.5 percent predicted by analysts in a Bloomberg survey, official data showed.
“When things are looking better everywhere else, the U.S. dollar comes under some pressure,” said Kiran Kowshik, a currency strategist at BNP Paribas SA in London. “Today’s retail sales print might be seen as important. People are formulating their opinions over what happens with forward guidance.”
The Bloomberg Dollar Spot Index fell 0.3 percent to 1,013.55, set for the lowest close since Dec. 10. The U.S. currency weakened 0.8 percent to 90.57 cents per Australian dollar and declined 0.5 percent to 85.62 cents against the New Zealand dollar.
Aussie Gains
Australia’s dollar climbed for a second day after a report showed the number of full-time employees in the nation surged 80,500, the biggest increase since 1991 and the second-biggest jump on record. China is Australia’s biggest trading partner.
New Zealand’s dollar touched its highest intraday price versus the greenback since May after the Reserve Bank’s 25-basis-point rate increase made it the first developed nation to exit record-low borrowing costs this year.
The U.S. dollar weakened 0.2 percent to 102.60 yen.
The gain in S&P 500 futures signaled the gauge will advance after closing yesterday 0.5 percent away from a record reached last week.
A Commerce Department report at 8:30 a.m. Washington time may show that sales at U.S. retailers climbed 0.2 percent in February, after 0.4 percent drop the previous month, according to the median economist forecast in a Bloomberg News survey.
Jobless Claims
Separate data will probably show that initial jobless claims rose to 330,000 in the week ended March 8 from 323,000 in the earlier period, economists said before the report.
Trading in the Stoxx 600 was 19 percent greater than the 30-day average, according to data compiled by Bloomberg. Retailers fell the most among 19 industry groups.
Wm Morrison Supermarkets Plc (MRW) plunged 7.4 percent after the smallest of the U.K.’s four main grocers forecast a profit decline and said it will sell property. J Sainsbury Plc lost 7.2 percent and Tesco Plc dropped 4.3 percent.
Adecco SA (ADEN) sank 6.5 percent after its largest investor said it will sell about 16 percent in the world’s biggest provider of temporary workers. Deutsche Lufthansa AG jumped 5.2 percent after Europe’s second-largest airline reinstalled dividend payments and maintained a target to triple operating profit within two years.
Emerging Markets
The MSCI Emerging Markets Index added 0.1 percent, rebounding from a one-month low. Benchmark gauges in Turkey and Thailand gained at least 1 percent.
Russia’s Micex Index slid 1 percent, heading for the lowest close since May 2012. The gauge has dropped 15 percent this year and the dollar-denominated RTS Index has tumbled 24 percent, the biggest declines among 94 indexes tracked by Bloomberg worldwide. Stocks have tumbled as President Vladimir Putin tightened his grip on Ukraine’s Crimea in the face of sanctions from the West.
Russian government officials and businessmen are bracing for sanctions resembling those applied to Iran after what they see as the inevitable annexation of Ukraine’s Crimea region, according to four people with knowledge of the preparations. Iran-style retaliation from the West, which would include freezing Russia’s foreign reserves and banking assets is being treated as an unlikely worst case, according to the people.
Goldman Forecast
Goldman Sachs Group Inc. cut its forecast for the Russia’s economic growth this year to 1 percent from 3 percent earlier, citing the Ukraine crisis, lower investment and capital outflows.
Gold advanced as much as 0.6 percent to $1,375.21 an ounce, the highest since Sept. 19. Copper dropped to $6,480 a metric ton. China is the biggest buyer of the metal.
Wheat climbed 1.3 percent after entering a bull market yesterday as shipping delays in Canada and Argentina and turmoil in Ukraine boosted prospects for U.S. exports.
Treasuries were little changed, with the 10-year note yield at 2.73 percent, before a $13 billion auction of 30-year debt today. Ireland’s 10-year yields were at a record-low 2.99 percent before that nation’s first bond auction since 2010.
Irish bonds gained as the nation’s borrowing costs dropped to a record in its return to debt auctions, the latest sign the region’s financial woes are abating. The 10-year yield fell four basis points to 3 percent.
To contact the reporters on this story: Nick Gentle in Hong Kong at ngentle2@bloomberg.net; Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editors responsible for this story: Stuart Wallace at swallace6@bloomberg.net Stephen Kirkland
