BLBG: Dollar Advances on Sales as Treasuries Decline With Gold
The dollar strengthened to a seven-year high against the yen and Treasuries fell after a report showed U.S. retail sales rebounded. European stocks pared declines and gold fell.
The dollar appreciated 0.8 percent to 116.72 yen at 8:45 a.m. in New York. The yield on 10-year Treasuries jumped three basis points to 2.37 percent. Gold slid 1.2 percent. Standard & Poor’s 500 Index futures added 0.1 percent and the Stoxx Europe 600 Index slipped less than 0.1 percent. The ruble headed for its 10th weekly decline and the cost of protecting Russian debt against default climbed to a three-year high. Hong Kong stock-index futures gained after China said it will waive capital-gains taxes for foreign investors and mainland individuals using the Shanghai-Hong Kong bourse link.
Retail sales increased in October as American consumers ate out and shopped for clothes, enjoying a windfall from cheaper gasoline. Data showed earlier today a rebound in Germany and France kept the euro-area economy growing in the third quarter, bolstering the case for continued stimulus, as Group of 20 leaders prepared for this weekend’s summit in Australia.
International investors said the world economy is in its worst shape in two years and the danger of deflation rising, according to a Bloomberg Global Poll this week.
The dollar climbed against all of its 16 major peers. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 of its most-traded peers, rose 0.5 percent.
Purchases increased 0.3 percent after a 0.3 percent drop in September, the Commerce Department reported today. The median forecast in a Bloomberg survey of 86 economists projected a 0.2 percent advance. Eleven of 13 major categories showed gains, indicating broad-based growth.
European Stocks
SBM Offshore NV declined 5.9 percent, the biggest slump in three months, after Brazilian authorities said the company won’t be invited to bid for contracts from the state-controlled Petroleo Brasileiro SA until a bribery investigation is completed.
Abengoa SA tumbled 26 percent to an almost one-year low amid concern orders are slowing for the Spanish energy and environment company.
Schibsted ASA rallied 25 percent, the most since 2000, as the Norwegian media company announced a deal for joint ventures in online classifieds with Naspers Ltd., Telenor ASA and Singapore Press Holdings Ltd.
Emerging Markets
The MSCI Emerging Markets Index lost 0.6 percent, leaving the gauge little changed on the week. Brazil’s Ibovespa slid 1.7 percent, extending yesterday’s 2.1 percent drop.
The ruble weakened 1 percent to 47.3015 per dollar, extending its decline for the five-day period to 1.4 percent. Russia’s currency has dropped for 10 weeks, the longest slump since 2005.
Credit-default swaps insuring Russian government debt rose 14 basis points to 296 basis points, the highest since November 2011, according to data compiled by Bloomberg. The contracts have increased for all but one of the past 11 days, the data show.
Futures on the Hang Seng China Enterprises Index rose 1.5 percent after the official close of Hong Kong’s stock exchange and contracts on the Hang Seng Index climbed 0.9 percent.
Chinese individuals who buy Hong Kong equities through the link get a three-year exemption, while mainland companies using the connect will be charged tax, the Ministry of Finance said in a statement today, clarifying its rules three days before the program’s debut.
WTI for December delivery reversed a loss, gaining 0.4 percent to $74.49 a barrel. The contract earlier slid as much as 1.3 percent to $73.25, the lowest since September 2010. Front-month prices are down for a seventh week, the longest stretch of decreases since 1986.
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: Stephen Kirkland at skirkland@bloomberg.net; Stuart Wallace at swallace6@bloomberg.net Stuart Wallace
