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Dollar Gains, Bonds Fall

Dollar Gains, Bonds FallDollar Gains, Bonds Fall

The dollar rose and Treasuries fell as US consumer prices unexpectedly increased last month. The Standard & Poor’s 500 Index advanced amid earnings reports, while European stocks gained with the region’s bonds on bets the central bank boosted stimulus.

The Standard & Poor’s 500 Index gained 0.2 percent at 10:02 am in New York, extending a rally to five days. The Stoxx Europe 600 Index rose 0.6 percent for a second day of gains. Greek and Portuguese bonds led European securities higher, bloomberg reported .

The yield on 10-year Treasuries added one basis point to 2.24 percent and the Bloomberg Dollar Spot Index rose 0.3 percent.

The S&P 500 surged 2 percent yesterday, its best day since October 2013, as corporate results topped estimates and investors speculated the European Central Bank will boost stimulus. Yahoo! Inc. and Broadcom Corp. rallied today after reporting sales that beat forecasts.

The US consumer price index added 0.1 percent in September. The ECB bought Spanish covered bonds, according to people familiar with the matter.

  Rate Bets

A slowdown in global economic growth and declining energy and commodity costs will restrain overall price pressures this month, indicating contained inflation will give Fed officials room to keep interest rates low well into 2015. At the same time, lower fuel bills are helping boost consumer confidence and purchasing power, which will underpin the US expansion.

The Bloomberg Dollar Spot Index, which measures the greenback against a basket of 10 major counterparts, rose 0.3 percent.

Treasuries reversed gains after the price report. Bonds have stabilized after concerns that Europe may tip into recession drove 10-year yields down to 1.86 percent last week, the lowest level in since May 2013.

  Emerging Markets

The MSCI Emerging Markets Index rose 0.7 percent, with benchmark gauges in Hong Kong, South Korea and Taiwan climbing more than 1 percent.

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong gauge advanced 1.5 percent to the highest close since Oct. 9 while the Shanghai Composite Index slid 0.6 percent.

China’s benchmark money-market rate fell for a sixth day, signaling fund injections by the central bank have boosted cash in the financial system.

BYD Co., the electric automaker partially owned by Warren Buffett’s Berkshire Hathaway Inc., advanced 3.5 percent after China said it would promote alternative-energy car use in Beijing.

India’s Sensex added 0.8 percent to the highest level this month on expectations Prime Minister Narendra Modi will accelerate policy changes to boost growth.

Russia’s Micex slided 0.5 percent and the ruble weakened 0.2 percent against the dollar.

 

Financialtribune.com