BS: Commodities Drop as Dollar Climbs on China; Italian Bonds Rise
Commodities fell for a second day, Treasuries rose and the dollar strengthened after a report showed Chinese services industries expanded at the weakest pace since at least March 2011. Italian government bonds climbed for a fifth day after Portugal completed a debt exchange.
The Standard & Poor’s GSCI gauge of 24 raw materials dropped 0.7 percent at 7:39 a.m. New York time, led by crops, while oil slipped 0.7 percent. Treasury 10-year note yields slid to the lowest in more than three weeks and the dollar appreciated against all but one of its 16 major peers. Italy’s 10-year yield fell to the least in almost two weeks. Futures on the S&P 500 Index (HSCEI) were little changed. Financial markets in China and South Korea were closed.
China’s purchasing managers’ index (MXEF) fell to 53.7 in September from 56.3 in August, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. U.S. employers added 140,000 workers in September, a release at 8:15 a.m. New York time from ADP Employer Services may show. Portuguese debt agency IGCP bought 3.76 billion euros ($4.9 billion) of bonds due next year in exchange for securities due in 2015 as the nation takes steps to return to international credit markets.
“The macro data is not going to come in such that risk assets will remain supported,” said Michael Leister, a fixed- income strategist at Commerzbank AG in London. “The cool-down in risk sentiment is going to set the tone for today.”
Stocks Volumes
The Stoxx Europe 600 Index (SXXP) of European shares slipped 0.1 percent. The volume of shares changing hands in the index’s companies was 18 percent less than the 30-day average, before a meeting of European Central Bank policy makers tomorrow, according to data compiled by Bloomberg.
FirstGroup Plc (FGP) plunged the most on record after the U.K. rail operator was stripped of the right to operate West Coast trains from London to Scotland. EasyJet Plc climbed 4 percent as Europe’s second-biggest discount airline said full-year earnings beat its forecasts.
Soybeans fell 0.6 percent to $15.22 a bushel and wheat dropped on signs demand is faltering. Soybeans have climbed 28 percent in the past year and wheat jumped 39 percent as crops were damaged from droughts in the U.S. and Russia. West Texas Intermediate oil declined to $91.21 a barrel and copper slipped 0.5 percent to $8,281 a metric ton, the first drop in five days.
Aussie, Rand
The MSCI Emerging Markets Index fell 0.1 percent, declining for the first time in five days. The Hang Seng China Enterprises Index slid as much as 0.4 percent, most in a week, before paring its loss to less than 0.1 percent.
Australia’s dollar declined for a fourth day as the nation recorded its widest trade deficit since 2008 in August. It dropped to $1.0198, the weakest level since Sept. 6.
South Africa’s rand depreciated 0.8 percent against the dollar on rising expectations the central bank will cut interest rates to stimulate growth. The dollar was little changed at $1.2915 per euro and 78.26 yen.
The Institute for Supply Management’s non-manufacturing index, which covers almost 90 percent of the U.S. economy, fell to 53.4 last month from 53.7 in August, according to the median forecast of 77 economists in a Bloomberg survey. Readings greater than 50 signal growth.
A euro-area composite index based on a survey of services and manufacturing purchasing managers fell to 46.1 in September, from 46.3 in August, London-based Markit Economics said today. Readings below 50 signal contraction.
Treasury 10-year yields fell one basis point to 1.61 percent, based on Bloomberg Bond Trader data, after reaching 1.60 percent, the lowest since Sept. 7.
Italian Yields
Yields on 10-year Italian government bonds dropped two basis points to 5.01 percent, after reaching the lowest since Sept. 21. The rate on similar-maturity Spanish securities was little changed at 5.74 percent.
The cost of insuring European corporate and sovereign debt using credit-default swaps fell for a third day, to the lowest levels in more than a week.
The Markit iTraxx Crossover Index of swaps on 50 mostly junk-rated companies declined seven basis points to 552.
To contact the reporters on this story: Paul Dobson in London at pdobson2@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
