BLBG:Dollar Index Rises as S&P 500 Futures Rise; Gold Declines
The Dollar Index rose to the highest level since July while South African and Australian currencies fell on speculation the Federal Reserve will scale back stimulus measures. U.S. stock-index futures gained while gold dropped.
The gauge of the U.S. currency against six trade partners added 0.3 percent to 83.862 at 10:50 a.m. in London, the highest since July on a closing basis. The rand sank to its weakest level since April 2009 and the Aussie slid to the lowest in almost a year. Spain’s 10-year bond yield fell nine basis points to 4.22 percent. Standard & Poor’s 500 Index futures climbed 0.3 percent. The Stoxx Europe 600 Index lost less than 0.1 percent. Gold fell for a seventh day, the longest slump in four years.
The U.S. central bank may reduce its $85 billion in monthly bond-buying as early as this summer amid signs the economy is gaining strength, Fed Bank of San Francisco President John Williams said. U.S. data today will probably show consumer sentiment rose this month and the Conference Board’s index of leading indicators rebounded in April, according to Bloomberg surveys of economists.
“Part of the reason for the current favourable dollar sentiment is the expectations of a change in monetary stance later this year,” Derek Halpenny, European head of global-markets research at Bank of Tokyo-Mitsubishi UFJ Ltd. in London, wrote in a report. Williams “is viewed as dovish” so his comments “carried more weight,” he wrote.
The Stoxx 600 has still advanced 0.7 percent this week, on course for a fourth straight week of gains. FLSmidth & Co. A/S, Europe’s biggest maker of cement production lines, slid 9 percent today, the most in a year, as earnings missed estimates. Coca-Cola HBC AG lost 5.5 percent as Credit Suisse Group AG managed the sale of a 1.7 percent stake in the drinks bottler.
Carmakers Climb
PSA Peugeot Citroen (UG) and Renault SA advanced more than 3.5 percent in Paris as European car sales rose for the first time in 19 months in April amid signs that governments may take measures to stem a contraction in the euro-area economy.
The increase in S&P 500 futures indicated the U.S. gauge will extend this week’s 1 percent gain. J.C. Penney Co. fell 2.7 percent in German trading after the retailer’s net loss widened in the first quarter.
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment for May is due for release at 9:55 a.m. New York time. The gauge rose to 77.9 from 76.4 last month, according to the median projection in a Bloomberg survey of economists.
The Conference Board’s gauge of the economy’s outlook for the next three to six months rose 0.2 percent in April, economists said before a separate report.
Emerging Markets
The MSCI Emerging Markets Index lost 0.3 percent, heading for its first weekly decline in a month. India’s Sensex gauge slipped 0.1 percent while Russia’s Micex index jumped 1.1 percent. The Shanghai Composite Index (SHCOMP) jumped 1.3 percent on speculation the government won’t impose more real-estate curbs as the economy slows. Turkey’s two-year yield dropped to a record and stocks gained after Moody’s Investors Service raised the country to investment-grade status.
The rand extending its longest losing streak against the dollar in a year on concern that renewed labor unrest and falling commodity prices will weigh on South Africa’s economy. The currency depreciated as much as 1.2 percent to 9.4327 per dollar, falling for a seventh straight day.
The Australian dollar declined as much as 0.8 percent to 97.27 U.S. cents, the weakest level since June. It has slid 2.7 percent over the past five days. New Zealand’s currency dropped 0.6 percent to 81.07 U.S. cents, after falling to the lowest level since November.
Bonds Rally
The euro slipped 0.1 percent to $1.2872 and the yen weakened 0.2 percent to 102.50 per dollar.
Spanish and Italian bonds rose for a third day after European governments issued almost 37 billion euros of bonds and notes this week. Italy’s 10-year yield dropped eight basis points to 3.90 percent.
The cost of insuring European corporate bonds rose for the first time in four days. The Markit iTraxx Europe Index of 125 investment-grade companies added one basis point to 94.8 basis points, the highest level since May 14.
Gold dropped 0.5 percent to $1,378.77 an ounce. West Texas Intermediate oil advanced 0.2 percent to $95.36 a barrel.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Pratish Narayanan in Mumbai at pnarayanan9@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
