Dollar Falls, Stocks, Futures Rise Before Fed; Aussie Rallies
Nov. 2 (Bloomberg) -- The dollar weakened while stocks and U.S. index futures rose as the Federal Reserve prepared to inject funds in the American economy. Australia's dollar climbed to the highest level since it was floated in 1983 after an unexpected interest-rate increase. Commodities advanced.
The dollar depreciated versus 12 of its 16 most-traded peers at 9 a.m. in New York, while the Aussie climbed above parity with the U.S. currency. Standard & Poor's 500 Index futures rose 0.6 percent, while the Stoxx Europe 600 Index added 0.3 percent. Cotton jumped 3.9 percent, sugar advanced 3.1 percent and crude oil increased 1.3 percent. Irish 10-year government bonds tumbled for a sixth consecutive day, driving the yield difference over benchmark German bunds to a record.
The Fed will probably start a fresh round of stimulus tomorrow, announcing a plan to purchase at least $500 billion of long-term securities, according to economists surveyed by Bloomberg News. As U.S. policy makers consider measures to boost the economy against the backdrop of mid-term congressional elections, other central banks are seeking to curb inflation. Australia raised its overnight cash rate target to 4.75 percent, while India increased the repurchase rate to 6.25 percent.
"The dollar is likely to remain under pressure while the market is waiting for more clarity from the Federal Reserve and the election result," said Henrik Gullberg, a currency strategist at Deutsche Bank AG in London. "Concern that there will be a political gridlock that would prevent the U.S. government from pursuing efficient policy is weighing on the currency."
Dollar, Aussie
The U.S. currency depreciated 1 percent to $1.4029 per euro, while the Dollar Index, which tracks its performance against those of six of the nation's trading partners, declined 0.7 percent. The Aussie advanced 1.8 percent to 80.86 yen, appreciating against all 16 of its major counterparts.
The gain in U.S. futures indicated the S&P 500 may advance for a second day. The index surged 13 percent in September and October, the best performance in those months since 1998.
Pfizer Inc. reported third-quarter adjusted profit of 54 cents a share, compared with a 51-cent average estimate of analysts surveyed by Bloomberg. Newmont Mining Corp., the largest U.S. gold producer, said profit excluding gains on asset sales was $1.08 a share, topping the 95-cent average estimate in a Bloomberg survey. About 80 percent of the companies in the benchmark gauge that reported results since Oct. 7 have surpassed estimates for per-share profit, according to data compiled by Bloomberg.
BBVA, Garanti
Oil and gas shares led the gains in Europe, as BP Plc climbed 1.2 percent and BG Group Plc rose 2.4 percent after earnings at both companies beat analysts' estimates. Danske Bank A/S, Denmark's largest lender, rallied 3.6 percent as profit rose. Banco Bilbao Vizcaya Argentaria SA, Spain's second-biggest bank, fell 1.2 percent after agreeing to buy a $5.8 billion stake in Turkiye Garanti Bankasi AS. Garanti slipped 1.1 percent and the MSCI Emerging Markets Index rose 0.3 percent.
The S&P GSCI index of 24 commodities climbed 1.2 percent as cotton advanced to a record and raw sugar jumped to the highest level since Feb. 1. Gold rose 0.4 percent to $1,359.43 an ounce and crude oil increased to $84 a barrel.
The Irish 10-year yield spread over bunds widened to 474 basis points, the second consecutive all-time high. The Greek- German gap increased 19 basis points to 841 basis points, the most since Sept. 28. The Portuguese yield premium rose seven basis points to 369 basis points. The Spanish and Italian 10- year spreads over bunds also widened.
The cost of insuring against a default by Europe's most indebted nations rose. Credit-default swaps tied to Ireland climbed 9 basis points to 507, a record based on closing prices, while swaps on Greece added 7 basis points to a five-week high of 839, according to data provider CMA. Spain climbed 2.5 basis points to 226.5, Italy increased 1.5 basis points to 176.5 and Portugal increased 1.5 basis points to 395.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editor responsible for this story: Paul Sillitoe in London at psillitoe@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/Víctor Lei
No comments:
Post a Comment