Treasuries tumble with gold as dollar advances

Bloomberg

US Treasuries headed for the longest losing streak in five years and the dollar rose as a private reading on US payrolls exceeded expectations, fueling bets the Federal Reserve will lift borrowing costs next week. US stocks fluctuated after a two-day slide.
The yield on 10-year U.S. notes climbed for an eighth day to reach 2.56 percent after ADP data indicated companies added the most workers in almost three years. Rate-sensitive equities led declines in the S&P 500 Index, while the dollar strengthened for a third day. Europe’s government debt fell.
The British pound slid for the eighth time in nine sessions as the chancellor of the exchequer delivered his spring budget. With a rate increase being priced into the market as a near-certainty, bond yields are catching up with expectations for accelerating inflation. At the same time, price swings in bonds, currencies and stocks are all falling, signaling investors are sanguine about the prospects for global growth against the backdrop of higher borrowing costs. There’s “a bit of supply pressure but there are bigger issues going on” for Treasuries, said Padhraic
Garvey,
London-based global head of debt and rates strategy at ING Groep NV. “The bigger issue is the realization that we’re facing into a Fed hike event and a reasonably positive environment from a European growth perspective.”

What’s ahead for the markets:
Mario Draghi is expected to keep QE going until the end of the year with underlying price pressures muted. Official U.S. jobs data for February are due Friday. Employers probably added around 190,000 workers to payrolls, in line with the average over the past six months and a sign of steady job growth, economists forecast.

Stocks
The S&P 500 slipped 0.1 percent to 2,366.90 as of 11:48 a.m. in New York, poised for a third straight loss. Financial pared earlier gains to trade higher by 0.2 percent, while phone and utility shares led losses. The Stoxx Europe 600 added 0.2 percent after four days of losses.
Currencies
The Bloomberg Dollar Spot Index strengthened 0.3 percent, extending two days of gains after data from the ADP Research Institute showed private payrolls climbed by 298,000, compared with the 187,000 median projection of analysts surveyed by Bloomberg. The British pound slipped 0.3 percent to $1.2168, falling for a third day, and the euro fell 0.1 percent to $1.0555.

Bonds
The dollar advance pressured U.S. Treasuries through last week’s lows. The 10-year sector underperformed ahead of today’s auction, with yields climbing five basis points to 2.5651 percent. German bonds dropped, following Treasuries, with 10-year yields rising five basis points to 0.37 percent. Long-dated French bonds dropped from the open with 10-year yields rising six basis points to 1.02 percent.

Commodities
Gold for immediate delivery dropped 0.5 percent to $1,210.08 an ounce after earlier touching the lowest since Feb. 3. Crude oil inventories rose 8.21 million barrels, according to Energy Information Administration data. West Texas Intermediate crude lost 0.7 percent to $52.75 a barrel. Copper futures rebounded after a four-day slump. Metal for three-month delivery added 0.6 percent to $5,804 a metric ton.