Treasuries fluctuate; Morgan Stanley says rate wagers too high S&P 500 trades near record; emerging-market shares climb Share on Facebook Share on Twitter The dollar fell toward a three-month low amid speculation interest rates will stay low amid uneven growth in the world’s largest economy. Brent rallied above $50 a barrel for the first time since July. The greenback dropped against most of its major peers after minutes of the Federal Reserve’s last meeting damped prospects for higher borrowing costs. Benchmark 10-year Treasury notes were little changed as Morgan Stanley said investors are overestimating the chances of a rate hike this year. The S&P 500 Index traded near record levels, while emerging-market shares halted a two-day slide. Oil held gains after the longest advance in more than a year as U.S. crude and gasoline stockpiles declined. Speculation that central banks in the world’s biggest economies will remain accommodative amid uneven growth propelled global equities to a one-year high this month and sent the dollar tumbling. The Fed minutes struck a more dovish tone when compared with comments this week from New York Fed chief William Dudley, who flagged the prospect of a rate hike as soon as next month. Dudley will hold a press briefing on Thursday in New York and his San Francisco counterpart, John Williams, is also due to speak. “Central banks are going to remain quite accommodating,� said Benno Galliker, a trader at Switzerland’s Luzerner Kantonalbank AG. “Rates are going down and down and down.� Currencies The Bloomberg Dollar Spot Index, which tracks the currency against 10 peers, fell 0.2 percent at 9:30 a.m. in New York. Britain’s pound was the biggest winner against its U.S. counterpart, climbing after a report showed U.K. retail sales jumped more than economists forecast in the month after Britain voted to quit the European Union. Sterling strengthened 0.8 percent to $1.3141. The euro rose 0.2 percent to $1.1311 as policy-meeting minutes showed European Central Bank officials “widely� agreed that their immediate reaction to the outcome of the U.K.’s referendum shouldn’t fuel excessive speculation about more stimulus. The MSCI Emerging Markets Currency Index was little changed after Wednesday’s slump. Mongolia’s tugrik fell for a record 24th day even as the central bank raised its key rate to 15 percent. Bonds Treasuries due in a decade were little changed, leaving the yield at 1.55 percent. Morgan Stanley recommends buying five-year notes, saying the absence of inflationary pressures will push the probability of a Fed rate increase this year to 30 percent in coming weeks. The likelihood was 49 percent on Wednesday, according to Bloomberg calculations based on Fed fund futures. “Inflation holds the key to further Fed rate hikes,� Matthew Hornbach and Guneet Dhingra wrote in a note to clients. “The market should take a September hike off the table and adjust lower the probability of a December hike accordingly.� Bond bulls have been emboldened as mixed domestic data, coupled with signs of slowing growth around the world, stayed the Fed’s hand since it raised rates from near zero in December. Officials have twice cut their projections for the path of increases this year. A JPMorgan Chase & Co. survey showed the largest net long positions for two months in the week ended Aug. 15. Yields on Ukrainian bonds maturing Sept. 2019 climbed 18 basis points to 8.37 percent, the highest on closing basis since June 28, after Ukrainian President Petro Poroshenko said in a televised speech the probability of an escalation in the conflict with Russia remains “very significant.� Stocks The S&P 500 was little changed as utility shares fell, while energy companies gained. With the earnings season winding down, Wal-Mart Stores Inc. rose after increasing its annual earnings forecast as quarterly results topped analysts’ estimates. Cisco Systems Inc. fell after the biggest maker of equipment that runs the Internet announced plans to cut about 7 percent of its workforce. American stocks have risen in six out of the past eight weeks on better-than-estimated corporate results, an improving labor market and optimism central banks will stay supportive of growth. The gains have pushed the equity benchmark’s valuation relative to future earnings to the highest in more than a decade. European stocks climbed for the first time in five days as miners led the increase in the Stoxx Europe 600 Index amid a rally in commodities. Among stocks moving on corporate news, Vestas Wind Systems A/S jumped after raising its annual guidance. Dutch insurer NN Group NV, spun off by ING Groep NV through an initial public offering two years ago, rallied after reporting an improved capital position. Denmark’s Jyske Bank A/S advanced as it raised its share buyback program, while DFDS A/S jumped after the shipping company posted earnings that beat projections. Commodities The Bloomberg Commodity Index was set for the most enduring rally in more than two months as the dollar weakened. West Texas Intermediate crude rose for a sixth day, the longest advance in more than a year, as U.S. crude and gasoline stockpiles dropped from the highest seasonal level in at least two decades. Oil added 1 percent to $47.24 a barrel after gaining more than 12 percent over the previous five sessions. Brent for October settlement rose as much as 20 cents to $50.05 a barrel on the London-based ICE Futures Europe exchange.

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