BLBG: S&P 500 Futures Fall as Yen Climbs With Gold on Growth Concern
European stocks reverse earlier gains amid uncertain outloook
Gold climbs on cautious Fed stance while copper declines
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U.S. equity futures fell with European stocks and the yen strengthened to a 17-month high amid concern over the outlook for global economic growth.
Futures signaled the Standard & Poor’s 500 Index will fall after rallying the most in almost a month and European stocks declined, reversing earlier gains.Gold rose after minutes of a Federal Reserve meeting reaffirmed U.S. policy makers aren’t rushing to raise interest rates. The yen climbed against the dollar even after a government official said authorities would take action on foreign exchange if necessary.
Fed officials highlighted persistent risks facing the global outlook and the threats these posed to the relatively healthy American economy at their March meeting. Traders are assigning zero chance of the Fed increasing rates in April, with the odds not topping 50 percent until the December meeting. Dutch voters added to uncertainty by rejecting a European Union trade agreement with Ukraine, a vote that analysts said could embolden the campaign for the U.K. to leave the single market.
“There is a lot of fear in the market,” said Herbert Perus, head of equities at Raiffeisen Capital Management in Vienna, which has 28 billion euros ($32 billion) in assets under management. “A lot of large investors do not believe in rising stock prices and were positioning themselves for a downturn.”
The U.S. Labor Department releases jobless numbers on Thursday in a week light on economic data after the monthly payrolls report last week.
Currencies
The yen appreciated at least 0.9 percent against its 16 major peers, climbing 1.3 percent to 108.35 per dollar at 7:15 a.m. in New York.
“The yen is being driven higher by risk aversion and by market participants testing the Bank of Japan’s tolerance toward a stronger currency,” said Thu Lan Nguyen, a foreign exchange strategist at Commerzbank AG in Frankfurt.
The euro weakened against most of its major peers after ECB Executive Board member Peter Praet said the European Central Bank can boost the scale of its support to the euro-area economy yet further in the event that fresh risks to the outlook arise.
The Fed meeting records shed more light on the decision to keep rates unchanged last month. They showed U.S. policy makers debated an April rate hike, though several officials advocated a cautious approach, partly amid worries that slowing world growth could crimp the U.S. economy’s expansion.
Stocks
Futures on the S&P 500 Index slipped 0.4 percent. The Stoxx Europe 600 Index slipped 0.3 percent. Daimler AG and 24 other companies are trading without the right to dividends today, shaving 0.4 point off the equity measure.
Bank stocks were among the biggest decliners in Europe, with Deutsche Bank AG, Nordea Bank AB and Intesa Sanpaolo SA all falling about 3 percent. Drugmakers were headed for the highest levels in a month, with AstraZeneca Plc set for its biggest two-day surge since November, and Shire Plc for its highest price since January. The collapse of the merger between Pfizer Inc. and Allergan Plc has led to deals speculation, and investors are also holding on to defensive companies at a time of economic uncertainty.
Marks & Spencer Group Plc gained as much as 3.4 percent after clothing sales beat analysts’ estimates.
The MSCI Emerging Markets Index of stocks gained 0.3 percent.
Commodities
Gold for immediate delivery rose 1.1 percent to $1,236.36 an ounce following Wednesday’s 0.7 percent retreat.
Copper for delivery in three months declined with industrial metals on the London Metal Exchange. Nickel and zinc fell on concerns that prospects for the global economy remain fragile.
West Texas Intermediate crude slipped 0.1 percent to $37.72 a barrel following last session’s 5.2 percent jump, its steepest one-day gain since March 16. Brent was little changed at $39.86 a barrel.
U.S. crude stockpiles fell 4.94 million barrels last week, data from the U.S. Energy Information Administration showed, after analysts predicted a 2.85 million-barrel gain. Refineries processed the most oil in three months as output and imports slipped.
Bonds
Treasuries gained, with the yield on 10-year notes falling three basis points to 1.73 percent. Jamie Dimon, chief executive officer of JPMorgan Chase & Co., said in an annual letter to shareholders that he’s concerned demand for Treasuries will decline and the Fed will raise interest rates faster than people expect.
The U.K. sold 10-year bonds at a record low yield of 1.514 percent at a sale on Tuesday. A measure of demand for the securities climbed to the highest since 2014.
Spain’s 10-year government bond yields climbed to a two-week high as investors bought 3.37 billion euros of conventional securities in an auction. The rate on similar-maturity German bunds dropped two basis points to 0.10 percent.
The nation’s 10-year bonds were sold at a higher yield that at the previous auction on March 17. The yield on the securities has climbed for six days, their longest streak since July 2012. The country, which hasn’t had an elected government since an inconclusive election in December and missed its 2015 budget-deficit goal, also sold inflation-linked debt in the auction of securities due between 2021 and 2046.
