Global markets: Inflation weighs on yields, dollar; stocks lacklustre

Global markets: Inflation weighs on yields, dollar; stocks lacklustre

Last Updated: Fri, Oct 13, 2017 13:03 hrs
NYSE

NEW YORK: U.S. Treasury yields dipped and the dollar pared gains on Thursday as investors waited on U.S. inflation data while Wall Street stock indexes were largely unchanged as earnings season kicked off with a whimper.

U.S. Treasury prices gained after the Treasury Department saw strong demand for a sale of 30-year bonds.

While investors cheered an increase in the U.S. producer price index (PPI) for last month, inflation concerns were still in focus ahead of consumer price index (CPI) data on Friday after Federal Reserve minutes showed a more guarded view.

“PPI was a little bit better, but that doesn’t really translate well to CPI,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. “I think for the most part, markets are still waiting for the CPI report tomorrow.”

The dollar turned negative as sterling jumped to an eight-day high against the dollar with analysts citing a report in Germany's Handelsblatt newspaper that the European Union could offer Britain a two-year transitional Brexit deal.

In U.S. stocks, banks and media companies were the biggest drags on the S&P 500 as AT&T Inc fuelled concerns about video subscribers and investors took fright at comments from JPMorgan and Citigroup on consumer debt.

Scott Clemons, chief investment strategist for Brown Brothers Harriman in New York, said that "after a long stretch of consecutive highs in the market, with earnings, even if they are slightly disappointing" that is an excuse to sell off.

The Dow Jones Industrial Average fell 17.09 points, or 0.07 percent, to 22,855.8, the S&P 500  lost 2.1 points, or 0.08 percent, to 2,553.14 and the Nasdaq Composite dropped 2.41 points, or 0.04 percent, to 6,601.14.

The pan-European FTSEurofirst 300 index rose 0.01 percent and MSCI's gauge of stocks across the globe gained 0.12 percent. The MSCI index reached a record high, as it has for seven of the past eight trading days.

Benchmark 10-year notes last rose 6/32 in price to yield 2.3248 percent, from 2.345 percent late on Wednesday.

The 30-year bond was last up 15/32 in price to yield 2.8562 percent, from 2.876 percent late on Wednesday.

After four straight days of declines, the dollar index, tracking the greenback against a basket of major currencies, rose 0.02 percent.

The euro was down 0.15 percent to $1.1839 snapping four straight days of gains after rising to its highest since Sept. 25 earlier in the session.

Bitcoin smashed through the $5,000 barrier for the first time and was last up 10 percent on the day.

Meanwhile, sterling rose to its highest against the greenback since Oct. 4. It had fallen earlier after the European Union's chief negotiator said Brexit talks were at an "impasse," ramping up political risks for the currency which is down about 12 percent since last year's EU vote.

Sterling last traded at $1.3273, up 0.39 percent on the day.

Oil prices rebounded from earlier losses, although they were still down on the session, after the U.S. Energy Department reported a larger-than-expected decline in U.S. inventories and a falloff in weekly production.

U.S. crude fell 1.29 percent to $50.64 per barrel and Brent was last at $56.30, down 1.12 percent.

Spot gold added 0.2 percent to $1,294.62 an ounce.



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