Brexit will need U.K. parliamentary vote after court decision Global stocks fluctuate as traders assess earnings, polls Share on Facebook Share on Twitter Global bonds declined after the Bank of England said it’s no longer expecting to cut interest rates again this year. Sterling rallied after a court ruled that the U.K. must hold a vote in Parliament before starting the two-year countdown to Brexit. Government debt fell in 21 out of the 25 markets tracked by Bloomberg, led by Britain’s gilts, while the pound posted the biggest advance among the world’s major currencies. Equities fluctuated as traders assessed mixed corporate earnings amid fresh polls showing Hillary Clinton leading Donald Trump in the presidential race. Oil was little changed. Traders have parsed economic data and remarks from policy makers to weigh whether growth is strong enough for major central banks to start shifting away from their ultra-loose stance. BOE officials raised their forecasts for growth and inflation, and indicated concern that higher consumer prices may even warrant tightening policy at some point. The statement came a day after the Federal Reserve left rates on hold and kept the option open for a hike in December, doing little to soothe anxiety over the U.S. election next week. “It’s a market consolidation and stabilization in the absence of any bad news,� said Barthelemy Debray, a fund manager at Paris-based Cogefi Gestion, which has assets under management of about 500 million euros ($555 million). “We will see more volatility until Tuesday’s U.S. presidential elections.� The latest ABC/News Washington Post tracking poll had Democrat Hillary Clinton up 47 percent to Republican Donald Trump’s 45 percent, while a New York Times CBS tally had Clinton leading 45 percent to 42 percent. Bonds Treasury 10-year note yields rose two basis points, or 0.02 percentage point, to 1.82 percent at 9:54 a.m. in New York, according to Bloomberg Bond Trader data. The 1.5 percent security due in August 2026 fell 5/32, or $1.56 per $1,000 face amount, to 97 5/32. Ten-year gilt yields jumped six basis points to 1.23 percent, poised for the biggest increase in a week. The yield on Spanish 10-year bonds advanced two basis points to 1.22 percent, after dropping nine basis points the previous day. Yields on German 10-year bunds, the region’s benchmark securities, rose three basis points to 0.16 percent. Currencies Sterling climbed against all of its 16 major peers, with the rally trimming the pound’s plunge versus the dollar in 2016, the worst among major currencies. The pound rose 1.4 percent to $1.2473 as of 12:50 p.m. in London, the biggest increase since July 14. “There’s finally some good news for the pound,� said Kathleen Brooks, a research director at brokerage City Index in London. “The market has rapidly priced out the prospect of a rate cut, given the much more hawkish-than-expected inflation report,� while the court ruling brought “a good type of uncertainty� as it may delay the triggering of Brexit. Mexico’s peso advanced 0.5 percent to 19.2790 against the dollar, making it the second strongest among 24 emerging markets tracked by Bloomberg, after the recent election polls put Clinton ahead by at least two percentage points. Mexico’s currency tends to weaken when Trump gains momentum in the presidential race as he has pledged to renegotiate the North American Free Trade Agreement that’s tied the country to the U.S. and to build a wall along the border to keep immigrants out. The Bloomberg Dollar Spot Index dropped 0.2 percent, dropping for a fifth straight day. Stocks U.S. stocks fluctuated, with the S&P 500 Index trying to avoid its longest losing streak in eight years, amid anxiety over the outcome of the presidential election and before tomorrow’s payrolls report. The S&P 500 added 0.1 percent to 2,100.52, rising from the lowest since July 7. “Until a week ago, the market calculated Hillary would win, but now the race seems to be on again,� said Christian Zogg, head of equity and fixed income at LLB Asset Management in Vaduz, Liechtenstein. “Nobody knows really what to expect from Trump, so the market is bound to get nervous. In addition, there is always the Fed hovering over the market.� Ahead of tomorrow’s monthly payrolls report, a reading today today showed filings for unemployment benefits unexpectedly rose to the highest level in almost three months. Investors will also weigh gauges on factory orders and growth in services industries later. Fed officials yesterday reinforced expectations for a hike in December after saying the argument for higher borrowing costs strengthened further amid accelerating inflation. Traders are pricing in a 78 percent chance the central bank will act next month. The Stoxx Europe 600 Index rose for the first time in 10 days, climbing 0.6 percent. The rally in the pound pushed the FTSE 100 Index down 0.4 percent as exporters tumbled. Better-than-estimated earnings at Societe Generale SA and ING Groep NV sent the stocks up at least 3 percent or more, while Credit Suisse Group AG lost 5.5 percent as its surprise profit was fueled by one-time gains. Egypt’s stocks led gains among equities after the central bank said it would allow the currency to float as part of measures designed to tackle a dollar shortage that has sapped economic growth. Commodities Crude steadied after a record surge in U.S. inventories sent prices plunging on Wednesday, capping the longest losing streak in two months. West Texas Intermediate oil was little changed after tumbling 2.9 percent yesterday following a report from the Energy Information Administration that stockpiles increased by 14.4 million barrels last week. OPEC members who are claiming exemption from an agreement to limit supplies boosted their production in October, according to a Bloomberg survey. A measure of oil volatility is near the highest level in more than a month as investors in broader financial markets stay cautious amid a tightening White House race. "The combination of the large inventory build and reports of increasing OPEC production knocked the blocks from under the bulls," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. "We overshot yesterday and are catching our breath. We won’t see a strong move in prices until there’s important news on supply or demand, or the election is over." West Texas Intermediate for December delivery climbed 16 cents to $45.50 a barrel at 9:13 a.m. on the New York Mercantile Exchange. Brent for January settlement rose 27 cents to $47.13 a barrel on the London-based ICE Futures Europe exchange.

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