Treasurys rally as investors bid up safety marketwatch/column/bond%20report NEW YORK (MarketWatch) — Treasury prices surged as stocks sold off Thursday, pushing yields sharply lower as the market digested a more dovish stance from the Federal Reserve. The 10-year Treasury note yield was down 4 basis points at 2.648%. The benchmark note has been trading within a yield range between 2.60% and 2.80% for most of the year thus far. The 30-year bond yield fell 4.5 basis points to 3.519%, and the 5-year note yield fell 5 basis points to 1.589%. Treasury investors have been trying to decipher when the Federal Reserve will act to hike its near-zero fed funds rate, which central bankers have said depends on improvement in the economy. Minutes from the Federal Reserve’s last policy meeting in March confirmed the bank’s dependency on data for its policy-making, reaffirming that low inflation and lagging parts of the labor market would keep it from hiking rates. The Treasury Department sold $13 billion in 30-year bonds Thursday at a yield of 3.525%, part of a $64 billion trio of sales this week that included 3-year notes and 10-year notes. Bidders offered to buy 2.52 times the amount of debt for sales, compared with an average of 2.39 times in the last six sales. Indirect bidders, which often include foreign central banks, took down 43.3% of the sale, compared with 41.9% in recent auctions. Direct bidders, which often include U.S. asset managers, bought 17.9%, compared with 16.2% in recent sales. Data on Thursday showed jobless claims dropped by 32,000 last week to a seasonally adjusted reading of 300,000, nearly the lowest in seven years. Economists polled by MarketWatch had expected 320,000. Following a cold winter that has been blamed for subdued economic activity, the jobless claims data could be taken as a sign of a spring rebound. Dollar stumbles as rate hike expectations pushed back reuters/article/2014/04/10/us-markets-forex-idUSBREA330R620140410 (Reuters) - The dollar dropped to three-week lows against the yen and the Swiss franc on Thursday, sliding for a second day after minutes of the Federal Reserves March meeting disappointed investors who had been positioned for an interest rate increase early next year. The greenback has fallen versus the yen in four of the last five trading days. Against the Swiss franc, the dollar weakened for a fourth straight session on Thursday. A better-than-expected U.S. weekly jobless claims report failed to lift the dollar, reflecting the broad bearish sentiment on the greenback. The Labor Department said showed new claims for jobless benefits fell to 300,000, near a seven-year low and below the consensus forecast of 320,000. The data was overshadowed by Wednesdays release of the minutes of the Feds March policy meeting. The minutes showed officials were worried that the U.S. central banks rate forecasts might be interpreted by investors as mapping out a more aggressive cycle of rate hikes than was actually expected. Investors also viewed the discussion in the minutes about the amount of slack in the labor market as dovish, all of which left the dollar struggling against most major currencies. In late trading, the dollar was down 0.5 percent versus the yen, at 101.41 yen, having fallen to 101.34, its lowest since March 19. The dollar slipped against the Swiss franc to 0.8753 franc, its lowest level in three weeks, as U.S. two-year Treasury yields fell sharply. The greenback last traded at 0.8760 franc, down 0.4 percent. The dollar index hit a three-week low of 79.330 .DXY, well below a seven-week high of 80.599 set only last Friday. It last stood at 79.378, down 0.1 percent on the day. The Swedish crown was the big mover in Europe. It fell to its lowest level in 3-1/2 months against the euro on higher-than-usual volume after inflation data fell short of expectations and cemented expectations the Riksbank will cut interest rates in coming months. The euro was last at 9.0716 crowns, up 1.0 percent. Given the dollars struggles, the euro rose to $1.3889, up 0.3 percent. But traders are wary of pushing it higher because of expectations that the European Central Bank could step up its rhetoric against a strengthening currency and its impact on disinflation. Bundesbank chief Jens Weidmann reiterated on Thursday that if there is a prolonged period of low inflation, the ECB will consider unconventional instruments. Last week, ECB chief Mario Draghi flagged the chances of quantitative easing. Nasdaq marks worst day since November 2011 as biotechs sink reuters/article/2014/04/10/us-markets-stocks-idUSBREA360QI20140410 (Reuters) - The Nasdaq suffered its biggest drop in two-and-a-half years on Thursday after another sharp selloff in biotech and momentum names, including Gilead Sciences and TripAdvisor, increasing investor anxiety about a broader pullback. The Nasdaq biotechnology index .NBI shed 5.6 percent, its biggest one-day drop since August 2011. The S&P 500 also posted its biggest percentage loss since February 3, while the Nasdaq has dropped 7 percent from its closing high for the year, set on March 5. The selling also hit the shares of three companies in their first day of public trading after their initial public offerings were priced on Wednesday night. All three IPOs ended lower. The Dow Jones industrial average plummeted 266.96 points or 1.62 percent, to end at 16,170.22. The S&P 500 lost 39.09 points or 2.09 percent, to close at 1,833.09. The Nasdaq Composite dropped 129.794 points or 3.1 percent, to 4,054.106. The S&P 500 closed below its 50-day moving average for the first time since February 10, while the CBOE Volatility index spiked 14.98 percent to end at 15.89, still at historically low levels. Volume was high, with 7.5 billion shares changing hands on U.S. exchanges, well above the 6.8 billion average so far this month, according to data from BATS Global Markets. Decliners outnumbered advancers on the New York Stock Exchange by a ratio of 3.6 to 1. On the Nasdaq, about 6.6 stocks fell for every one that rose. Brent crude drifts lower as China slows, Libya worries on hold reuters/article/2014/04/10/markets-oil-idUSL3N0N217D20140410 NEW YORK, April 10 (Reuters) - Global crude oil drifted modestly lower on Thursday, pressured by weaker economic data from China as well as the prospect of a rebound in oil exports from Libya. Both Chinas exports and crude imports fell, stoking concerns about demand in the worlds second-biggest economy. The trade data coincided with news that OPEC lowered its 2014 forecast for oil demand. The Libyan government lifted a force majeure on the eastern port of Hariga, which had been blockaded due to a dispute with rebel groups. However, a force majeure remained in effect at Zueitina, the other Libyan port the government recently reopened, making a full rebound in exports uncertain. Tensions between the West and Russia bubbled in the background as Russian President Vladimir Putin threatened to cut off natural gas supplies to Ukraine if it did not pay its bill. U.S. crude oil was supported slightly by news that U.S. jobless claims fell to their lowest level in 7 years. But that was not enough to outweigh data released Wednesday that showed U.S. crude oil stocks jumped by 4 million barrels last week. Brent settled 52 cents lower at $107.46 a barrel. U.S. crude settled 20 cents down at $103.40 per barrel. The closely watched and traded Brent-WTI spread CL-LCO1=R tightened 32 to settle at $4.06, its narrowest settlement since Sept. 19. Further losses in Brent were stemmed by optimism after the U.S. Federal Reserves dovish policy meeting suggested the central bank may be more cautious toward raising interest rates, easing market concerns of a pullback in stimulus before the economy is ready. In his most explicit threat to date, President Vladimir Putin warned European leaders Russia would cut natural gas supplies to Ukraine, which could lead to a reduction of onward deliveries to Europe. The threat risks worsening a dispute with the West over Russias annexation of Crimea, and investors are watching to see whether it results in stiffer economic sanctions on Moscow. A steep fall in U.S. gasoline stockpiles also put a floor under oil prices. Gasoline stocks fell by 5.2 million barrels to 210 million barrels in the week ended April 4, Energy Information Administration (EIA) data showed, more than the expected 729,000-barrel draw. Demand for gasoline was 4.4 percent higher than a year ago at 8.8 million barrels per day. Gold extends rally after Fed minutes as stocks tumble reuters/article/2014/04/10/markets-precious-idUSL3N0N22CH20140410 NEW YORK/LONDON, April 10 (Reuters) - Gold rose to its highest price in more than two weeks on Thursday, boosted by a sharp pullback in U.S. equities and follow-through buying a day after minutes from the Federal Reserves latest policy meeting revealed its cautious approach in future interest-rate hikes. Gold came uncoupled in the afternoon from U.S. equities, stalling even as the S&P 500 index accelerated losses. The S&P, which fell 2 percent for the day, has given back all its gains to turn negative for the year. The yellow metal largely ignored data signalling a stronger U.S. job market, with the number of Americans filing new applications for unemployment benefits tumbling last week to the lowest level in nearly seven years. Analysts said gold buying accelerated following Wednesdays Fed minutes, which showed officials fretted last month that investors would overreact to policymakers fresh forecasts on interest rates that appeared to map out a more aggressive cycle of rate hikes than was actually anticipated. Spot gold was up 0.6 percent at $1,319.65 an ounce by 2:52 p.m. EDT (1852 GMT), having earlier hit $1,324.40, its highest since March 24. U.S. COMEX gold futures for June delivery settled up$14.60 to $1,320.50 an ounce, with trading volume about 35 percent below its 30-day average, preliminary Reuters data showed. Gold prices had come under pressure, falling to a seven-week low of $1,277.90 on April 1, on signs that strong U.S. economic data could prompt further dollar strengthening and comments from Fed Chair Janet Yellen on March 19 that interest rates could rise in the first half of 2015. Prices in top buyer China slipped back to a discount of about $2 an ounce on London prices on Thursday from a premium in the previous session. Also reflecting weak physical demand, gold stocks sitting in U.S. exchange warehouses are at a 10-month high. Among other precious metals, silver rose 1.1 percent to $20.07 an ounce. Platinum rose 1.4 percent to $1,455 an ounce, having earlier reached a three-week high of $1,459 an ounce and palladium gained 1.3 percent to $788.50 an ounce.
Posted on: Fri, 11 Apr 2014 06:21:33 +0000
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