The yen slipped 0.4 percent as of 7:36 a.m. in London, paring its steepest weekly gain this year, before the U.S housing data. The 10-year Treasury yield rose one basis point. Futures on the Euro Stoxx 50 Index gained 0.2 percent while Standard & Poor’s 500 Index futures added 0.1 percent. Copper advanced 1.2 percent. Zinc climbed 1.6 percent.
The dollar gained for the first time in three days versus the yen after Federal Reserve Bank of St. Louis President James Bullard said monetary policy may be at a “turning point” as the world’s largest economy rebounds. A report today may show sales of new homes in the U.S. increased in February to the highest level since May 2010.
“We like the idea of the U.S. dollar becoming stronger over the year,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp. (WBC), Australia’s second-largest lender. “There is a divergence between the two economies, with the U.S. recovery and not quite as compelling a story in Japan. This has probably got further to play out.”
Yen, Treasuries
The yen fell 0.4 percent to 82.86 per dollar, paring this week’s gain to 0.7 percent. The New Zealand dollar gained 0.4 percent to 81.24 U.S. cents after falling as much as 1.2 percent yesterday after data showed the nation’s economy grew at half the pace forecast by economists.
Treasuries snapped a three-day gain, with 10-year yields rising to 2.29 percent. U.S. government securities have handed investors a 1.4 percent loss this month as of yesterday, Bank of America Merrill Lynch indexes show.
Rising yields are the result of improvement in the American economy and a recognition that the Federal Reserve will “normalize” monetary policy, according to UBS AG, one of the 21 primary dealers that trade with the central bank. Bullard said the Fed’s first interest-rate increase since the global financial crisis could come late next year.
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