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Greenback near 15-month high as 10-year yield holds above 3%
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Earnings outlook weighs on equities; euro weakens before ECB
The dollar resumed its advance to head for a three-month high as the benchmark Treasury yield hovered above 3 percent after piercing that level Tuesday for the first time in four years. Stocks declined amid a flood of earnings.
The Stoxx Europe 600 Index fell along with U.S. equity-index futures after less-than-optimistic earnings forecasts Tuesday from bellwethers Caterpillar Inc. and 3M Co. spooked investors. Amazon Inc. and Samsung Electronics Co. Ltd. are among companies reporting this week. Earlier in Asia, stocks dropped from Japan to South Korea as technology shares faltered. The yen slipped to its lowest since early February and the euro fell ahead of tomorrow’s policy meeting by the European Central Bank.
Having been roiled by rising yields and threats to global trade in recent weeks, equity investors were looking to earnings season for some cheer. Instead, a mixed bag of results across market-driving tech shares and industrial bellwethers is doing little to calm nerves, with Wall Street seeing tepid profit forecasts as a sign the worldwide economic expansion may be near its peak.
Elsewhere, WTI oil drifted below $68 a barrel while most industrial metals declined and gold declined. Turkey’s lira gained ahead of a key rate decision by the country’s central bank. Australian equity and bond markets are shut for a holiday. Most emerging-market currencies weakened, though, led by South Africa’s rand.
These are some important events coming up this week:
- U.S. GDP data are due Friday.
- Earnings season continues. Among those reporting: Amazon.com and Samsung.
- The European Central Bank has a rate decision on Thursday. Investors will watch for any sign that officials are preparing a shift in stimulus plans for their June meeting.
- The Bank of Japan announces its latest policy decision Friday and releases a quarterly outlook report.
- The leaders of North and South Korea meet Friday.
Terminal users can read more in our markets live blog.
And these are the main moves in markets:
Stocks
- The Stoxx Europe 600 Index decreased 0.6 percent as of 8:16 a.m. London time, the lowest in more than a week.
- The U.K.’s FTSE 100 Index declined 0.6 percent.
- Germany’s DAX Index fell 0.2 percent.
- France’s CAC 40 Index dipped 0.5 percent.
- Futures on the S&P 500 Index decreased 0.3 percent.
- The MSCI Asia Pacific Index fell 0.6 percent.
- Japan’s Topix index fell 0.1 percent; Hong Kong’s Hang Seng Index declined 1.1 percent; South Korea’s Kospi sank 0.6 percent.
Currencies
- The Bloomberg Dollar Spot Index increased 0.3 percent to the highest in almost 15 weeks.
- The euro decreased 0.2 percent to $1.2208, the weakest in eight weeks.
- The British pound fell 0.2 percent to $1.3951.
- The Japanese yen declined 0.3 percent to 109.17 per dollar, hitting the weakest in 11 weeks with its sixth straight decline.
Bonds
- The yield on 10-year Treasuries climbed two basis points to 3.01 percent, reaching the highest in more than four years on its eighth straight advance.
- Germany’s 10-year yield gained two basis points to 0.65 percent, the highest in seven weeks.
- Britain’s 10-year yield increased two basis points to 1.539 percent, the highest in eight weeks.
- Japan’s 10-year yield rose one basis point to 0.069 percent, the highest in 10 weeks.
Commodities
- West Texas Intermediate crude decreased 0.2 percent to $67.55 a barrel, the lowest in more than a week.
- Gold decreased 0.5 percent to $1,323.96 an ounce, the weakest in five weeks.
- LME copper declined 0.7 percent to $6,961.50 per metric ton, the biggest drop in almost two weeks.
By Cormac Mullen and Robert Brand
— With assistance by Ravil Shirodkar
April 25, 2018, 5:21 PM GMT+10
Source: Bloomberg