Tuesday, 18 June 2013

S&P 500 Futures Gain While Yen Drops With U.S. Treasuries

By Paul Dobson & Pratish Narayanan - Jun 18, 2013 4:51 PM GMT+0400
Standard & Poor’s 500 Index futures advanced and the yen weakened, falling for a second day against the dollar, as investors awaited signs from the Federal Reserve about when it may start to reduce stimulus. U.S., U.K. and German government bonds dropped and European shares fluctuated.
S&P 500 futures added 0.2 percent as of 8:45 a.m. in New York and the Japanese currency depreciated 1.1 percent to 95.58 yen per dollar. The Stoxx Europe 600 Index drifted between gains and losses, with trading volume about 19 percent below the average over the past 100 days. Britain’s 10-year gilt yield jumped seven basis points to 2.15 percent while the rate on similar-maturity German debt rose six basis points to 1.56 percent and U.S. Treasury yields increased two basis points to 2.20 percent. Nickel led metals lower.
Yen Extends Drop as Asian Stocks Swing Before Fed The yen weakened against the world's major currencies. Photographer: Yuriko Nakao/Bloomberg
June 18 (Bloomberg) -- Mikio Kumada, a Hong Kong-based global strategist for LGT Capital Partners, talks about Japan and U.S. stocks, and his global investment strategy. Kumada also discusses Federal Reserve monetary policy. He speaks with Zeb Eckert on Bloomberg Television's "First Up." (Source: Bloomberg)
June 17 (Bloomberg) -- On today's "Street Smart," Trish Regan and Adam Johnson find your last trade of today and first trade for tomorrow. (Source: Bloomberg)
June 17 (Bloomberg) -- Catherine Yeung, Hong Kong-based investment director at Fidelity Investment Management Ltd., talks about China and Japan stocks, and investment strategy. Yeung also discusses Federal Reserve monetary policy. She speaks from Singapore with Rishaad Salamat on Bloomberg Television's "On the Move." (Source: Bloomberg)
June 17 (Bloomberg) -- Tim Condon, head of Asia research in Singapore at ING Groep NV, talks about Japan stocks, and the nation's fiscal and monetary policies. Condon also discusses the prospects for Federal Reserve monetary policy. He speaks with Zeb Eckert on Bloomberg Television's "First Up." (Source: Bloomberg)
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The Fed starts a two-day policy meeting today, about a month after Chairman Ben S. Bernanke said quantitative easing could be scaled back if the employment outlook showed sustainable improvement. U.S. housing starts rose and the cost of living increased less than forecast in May, reports today showed. European Central Bank President Mario Draghi said policy makers are considering further non-standard monetary-policy tools.
“Position adjustment ahead of Fed QE tapering still appears to be the main driver,” Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London, wrote in a research report today. Investor expectations are “building that the Fed may signal that it will soon begin to taper QE with both the U.S. economy and labor market improving,” he said.

Yen Retreats

The yen retreated against all 16 major peers. It slid 1.1 percent to 127.76 per euro. Australia’s dollar fell 0.9 percent to 94.59 U.S. cents after the Reserve Bank indicated the currency may weaken further.
The JPMorgan Global FX Volatility Index increased to 10.37 percent from 10.25 percent yesterday after climbing to a one-year high of 11.43 percent on June 13.
Kabel Deutschland Holding AG rose 3.8 percent to a record as Liberty Global Plc made a preliminary takeover offer for Germany’s largest cable provider, pitting the John Malone-controlled company against Vodafone Group Plc. Danske Bank A/S slid 5.2 percent after the Financial Supervisory Authority said Denmark’s biggest lender had underestimated its risky assets.

Home Starts

The S&P 500 index advanced 0.8 percent yesterday, when U.S. manufacturing and homebuilder confidence data rose and a British official said Group of Eight leaders see downside risks to the global economy abating. Reports today showed builders broke ground on 914,000 U.S. homes at an annualized rate, up 6.8 percent while below the the median estimate of 950,000 from 82 economists surveyed by Bloomberg. Another report showed the consumer price index was up 0.1 percent in May, half the median forecast, after falling 0.4 percent in April.
About three stocks gained for every two that fell in the MSCIEmerging Markets Index, which lost 0.5 percent. The Hang Seng China Enterprises Index slipped 0.1 percent after official data showing Chinese home prices climbed in almost all cities in May stoked concern the increases will limit the scope for monetary stimulus.
Treasury 10-year note yields increased two basis points to 2.20 percent after climbing five basis points yesterday. Portugal’s 10-year bond yield dropped 15 basis points to 6.10 percent after European Union Economic and Monetary Affairs Commissioner Olli Rehn said the EU is looking at possible “precautionary arrangements” that might help the nation exit its aid program.

Hotter Weather

Nickel, the worst performer this year among the six main industrial metals traded on the London Metal Exchange, retreated 1.2 percent to $14,115 a metric ton. The metal declined as much as 1.7 percent to trade at the lowest price since 2009. Copper for delivery in three months declined for a second day, falling 0.7 percent to $7,033.25 a ton.
Natural gas gained 1.2 percent to $3.921 a million British thermal units after jumping 3.8 percent yesterday, the biggest increase in seven weeks, on forecasts for hotter weather in late June that may spur demand from power plants. West Texas Intermediate crude added 0.3 percent to $98.02 a barrel.
Wheat advanced on concern that rain in parts of the U.S., the world’s largest exporter, will further delay harvesting that’s lagged behind last year’s pace. The contract for delivery in September increased 0.6 percent to $6.9150 a bushel on the Chicago Board of Trade. Soybeans for November delivery gained 0.3 percent to $12.8875 a bushel.
To contact the reporters on this story: Paul Dobson in London at pdobson2@bloomberg.net; Pratish Narayanan in Singapore at pnarayanan9@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net