BLBG:Oil Slides on Syria Talks; Gold Falls, Stocks Fluctuate
Oil and gold led commodities lower as the U.S. and Russia started talks on a plan for Syria to surrender its chemical weapons and investors weighed prospects for the Federal Reserve to cut stimulus. European stocks and U.S. equity-index futures were little changed.
West Texas Intermediate oil slid 0.7 percent to $107.84 a barrel at 7:54 a.m. in New York. Gold fell 0.8 percent $1,311.79 an ounce. The dollar rose against all but one of its 16 major peers. The Stoxx Europe 600 Index and Standard & Poor’s 500 Index (SPX) futures slipped less than 0.1 percent. Bonds pared earlier declines, with the yield on 10-year Treasuries two basis points higher at 2.93 percent and German bund yields little changed at 2.01 percent.
U.S. Secretary of State John Kerry reported a “constructive” start to talks in Geneva today with Russian Foreign Minister Sergei Lavrov over the chemical weapons. A report will probably show today that U.S. retail sales rose at a faster pace last month, according to a Bloomberg survey of economists. The Fed will decide to cut monthly purchases of Treasuries to $35 billion from $45 billion and keep mortgage-bond buying at $40 billion at its Sept. 17-18 meeting, another Bloomberg survey showed.
“A lot of the geopolitical risk in prices linked to Syria has deflated over the past week as the U.S. accepts to explore alternative diplomatic routes with the Russians to solving the Syrian crisis,” said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA in London.
First Decline
West Texas Intermediate crude headed for its first weekly decline in three weeks. WTI for October delivery fell as much as 1.2 cents to $107.31 a barrel in electronic trading on the New York Mercantile Exchange.
Gold dropped as much as 1.3 percent to $1,305.05 an ounce, the lowest since Aug. 8. Wheat declined 0.9 percent and corn fell 0.3 percent after the U.S. Department of Agriculture forecast more supplies.
Three shares fell for every two that advanced in the Stoxx 600. TDC A/S TDC dropped 3.1 percent as a group of private-equity firms sold a 4.17 billion kroner ($743 million) stake in Denmark’s biggest phone company. That amounted to a stake of about 11 percent, according to JPMorgan Chase & Co., which managed the sale.
Fresenius SE climbed 4.6 percent after its Helios unit agreed to buy 43 hospitals from Rhoen-Klinikum AG. The 3.07 billion-euro ($4.1 billion) acquisition will create Europe’s largest chain of private clinics. Rhoen-Klinikum rallied 11 percent.
Kabel Takeover
Kabel Deutschland Holding AG jumped 6.1 percent after Vodafone Group Plc said that investors representing at least 75 percent of the German company’s shares backed its 7.7 billion-euro bid. Vodafone had set a deadline of Sept. 11 for Kabel’s shareholders to accept the terms of the takeover.
S&P 500 futures were little changed as investors awaited a Commerce Department report at 8:30 a.m. in Washington that will probably show retail sales climbed 0.5 percent last month, according to the median of 84 estimates in a Bloomberg survey of economists. They rose 0.2 percent in July.
The MSCI Emerging Markets Index fell for a second day, losing 0.5 percent. The gauge has gained 3 percent this week, the biggest weekly advance since June. The Shanghai Composite Index lost 0.9 percent today, and the Hang Seng China Enterprises Index of mainland companies traded in Hong Kong slid 1.4 percent.
Yield Premium
The yield premium that investors demand to hold 10-year Treasury notes instead of two-year debt was at 2.46 percentage points, after reaching 2.55 percentage points on Aug. 22, the widest spread in more than two years.
Treasuries fell earlier after Nikkei reported that former U.S. Treasury Secretary Lawrence Summers will be named as Federal Reserve chairman. Summers would tighten Fed policy more than Janet Yellen, his main rival to replace Chairman Ben S. Bernanke, according to a Bloomberg Global Poll.
“We are in line with the market expectations and think tapering will start next week,” said Carl Hammer, head of foreign-exchange strategy at SEB AB in Stockholm. “The news about Summers is interesting if it is true, and is a small dollar positive. Everyone thinks he is going to be more hawkish” than his main rival Yellen, he said.
The dollar strengthened 0.2 percent to 99.74 yen and the euro slipped 0.1 percent to $1.3283.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Kyoungwha Kim in Singapore at kkim19@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
