BLBG: Dollar Climbs Spurred by Fed as Stocks Edge Lower: Markets Wrap
U.S. currency gains as Fedâ€™s Brainard supports rate hike soon
Markets settle after hectic 48 hours; oil drops on U.S. supply
The dollar extended gains as hawkish signals from the Federal Reserve continued to pile up, while stocks in Europe took a breather after Wednesdayâ€™s global rally. Oil and gold both fell.
The greenback headed for the longest winning streak since May and gold continued to retreat as Lael Brainard became the latest Fed official to support the case for an interest-rate hike â€śsoon.â€ť Record-high U.S. crude stockpiles sent oil toward its longest losing streak in two months. Europeâ€™s benchmark stock gauge edged lower after the biggest jump since November on Wednesday.
Investors are coming to grips with a week in which data indicated global growth is firming, stock gauges rose to unprecedented levels and the chances of a March interest-rate hike by the Fed surged. The odds for an increase in two weeks swelled past 65 percent after Brainard, who for months had argued to keep rates lower for longer, joined a steady flow of central bank officials saying the case for lifting borrowing costs has strengthened.
â€śThe data has been really strong and itâ€™s quite hard arguing for waiting,â€ť Trevor Greetham, head of multi-asset at Royal London Asset Management, told Bloomberg TVâ€™s Francine Lacqua. â€śInterest rates are just too low given the momentum in the economy and the low unemployment rate.â€ť
Data out on Thursday showed euro-area inflation accelerated to 2 percent in February, matching economistsâ€™ expectations and providing ammunition to critics of the regionâ€™s central bank who want to end stimulus. In the U.S., manufacturing expanded last month at the fastest pace in three years.
Read our Markets Live blog this week.
Upcoming events that traders are looking out for:
Janet Yellen gives an address on the economic outlook on Friday in Chicago.
Snap Inc. will start trading Thursday, listed on the New York Stock Exchange under the symbol SNAP. The maker of the disappearing photo app is going public at a valuation at least twice as expensive as Facebook Inc., and four times more costly than Twitter Inc.
The Chinese Peopleâ€™s Political Consultative Conference, an advisory body of more than 2,000 political elites, business executives and others, opens its annual session in Beijing on March 3.
Here are the main moves in markets:
The Stoxx Europe 600 Index dropped less than 0.1 percent at 6:21 a.m. in New York, slipping from a 15-month high hit earlier in the session. Consumer-related shares fell, led by Luxottica Group SpA after the company published a profit outlook for 2017 that was shy of analyst expectations. Utilities shares rallied after Engie SA said it sees earnings growth this year.
Futures on the S&P 500 traded 0.2 percent lower after the index jumped 1.4 percent on Wednesday. The Dow rallied above 21,000, capping a 35-day run between thousand-point milestones that matches the fastest on record.
Asian shares rallied. Tokyo stocks jumped to the highest since December 2015, Australiaâ€™s benchmark rose 1.3 percent, the most since November and the Jakarta Composite Index had its biggest advance this year. Hong Kongâ€™s Hang Seng erased gains after briefly topping 24,000.
The Bloomberg Dollar Spot Index added 0.3 percent, climbing for a fifth straight day.
The euro slipped for a third day, falling 0.2 percent to $1.0525.
The yen fell 0.5 percent to 114.28 per dollar, after declining 0.9 percent Wednesday.
Yields on 10-year Treasuries rose one basis point to 2.47 percent, after climbing six basis points Wednesday.
Yields on benchmark German notes climbed two basis points to 0.3 percent, the highest since Feb. 21.
Gold slipped 0.6 percent to $1,242.49 an ounce. The metal was at the highest level in more than three months last Friday.
West Texas Intermediate oil retreated 0.9 percent to $53.35 a barrel, dropping for a third day. Thatâ€™s the longest losing streak in two months as record-high U.S. stockpiles cast doubt on OPECâ€™s efforts to drain a global surplus.