BLBG:Dollar Strengthens With Global Stocks Before Jobs Data
The dollar strengthened to a five-week high and U.S. stock-index futures advanced before data forecast to show the nation’s jobs market improved. Portuguese bonds gained while silver led metals lower.
The Dollar Index, which tracks the currency against six major peers, rose 0.9 percent to 83.936, the highest level since May 29, at 9:30 a.m. in London. Standard & Poor’s 500 Index (SPX) futures jumped 1 percent after U.S. markets were closed for Independence Day yesterday. The Stoxx Europe 600 Index was little changed. The Portuguese bonds trimmed a seventh weekly drop. Silver slid 1.8 percent and copper fell 1.3 percent.
U.S. employers probably added 165,000 workers last month, almost the same as in May, and the jobless rate fell, according to Bloomberg surveys of economists before today’s reports. European Central Bank President Mario Draghi pledged yesterday to keep interest rates at a record low for an “extended period.” The statement contrasts with that of the Federal Reserve, which fueled last month’s global stock and bond rout by signaling debt purchases could be scaled back this year.
“Continued central bank stimulus across European economies is supporting sentiment,” said Matthew Sherwood, head of investment market research at Perpetual Ltd., which oversees $25 billion in Sydney. “Strong payrolls mean a strong U.S. economy, which is an important foundation particularly for emerging markets given their trade exposure. But that will bring forward expectations about the Fed’s tapering. The market could be volatile.”
Jobless Rate
The U.S. unemployment rate probably fell to 7.5 percent in June, matching April’s four-year low and down from 7.6 percent in May, according to the median of 82 economists’ estimates in a Bloomberg survey before the Labor Department report today. Payrolls grew by 165,000 workers, after rising 175,000 in May, the median of 70 projections shows.
Global equities have lost about $4 trillion in value and U.S. Treasury yields have climbed since May 22, when Fed Chairman Ben S. Bernanke indicated the central bank’s asset-buying program could be tapered should the job market continue to improve.
The purchases, currently at $85 billion a month, have helped the MSCI All-Country World gauge rally 14 percent in the past year. Ten-year U.S. bond yields have surged more than half a percentage point since May 21. The rate rose four basis points to 2.54 percent today.
Dollar Gains
The Dollar Index is poised for a third weekly advance with a 1 percent gain for the period. The dollar rose 0.3 percent to 100.30 yen after touching 100.86 on July 3, the highest level since May 31. The euro slipped 0.2 percent to $1.2888, while the pound fell 0.4 percent to $1.5005, after dropping to $1.4992, the lowest since March 14.
The gain by U.S. stock futures indicated that the benchmark S&P 500 will extend its 0.6 percent climb so far this week.
The Stoxx Europe 600 Index advanced less than 0.1 percent, with trading 16 percent less than the 30-day average. The gauge advanced 2.7 percent this week, its largest rally in more than two months.
Sky Deutschland AG jumped 5.7 percent today, rising to its highest price since 2008, after Goldman Sachs Group Inc. added the pay-television operator to its conviction-buy list. The brokerage predicted that the company’s number of subscribers will accelerate in the second half of this year. Seadrill Ltd. (SDRL) rose 1.6 percent as Bank of America Corp. recommended that investors buy shares in the offshore oil driller controlled by billionaire John Fredriksen.
Pakistan Loan
The MSCI Emerging Markets Index rose for a second day, adding 0.4 percent and trimming this week’s loss to 1.6 percent. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong gained 2 percent and China’s money-market rate capped a second week of declines. Benchmark gauges in Russia and India both rose 0.7 percent.
Pakistan’s KSE 100 Index climbed 1.1 percent to the highest level since June 17 after the country and the International Monetary Fund agreed on a $5.3 billion loan to boost the nation’s depleted currency reserves.
Portugal’s 10-year yield fell 30 basis points to 6.97 percent, trimming its weekly advance to 52 basis points. The nation’s 10-year securities are heading for their seventh consecutive weekly drop.
Spain’s 10-year yields dropped three basis points to 4.62 percent, headed for a 15 basis point decline this week. Italian 10-year yields fell four basis points to 4.36 percent, set for an 19 basis-point decline this week.
Silver fell to $19.20 an ounce, extending the weekly drop to 2.4 percent. Silver futures trading in New York was 62 percent higher than the average of the past 100 days. Copper dropped 1.3 percent and West Texas Intermediate oil declined 0.3 percent to $100.99 a barrel.
Copper is heading for a weekly gain of 1.6 percent, the first in five weeks, and oil is up 4.6 percent, the most since the end of April. Oil trading in New York was more than three times the average for the past 100 days.
To contact the reporters on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net; Emma O’Brien in New York at eobrien6@bloomberg.net
To contact the editors responsible for this story: Stuart Wallace at Swallace6@bloomberg.net;
