Dollar adds to rally, stocks slip as banks falter

Bloomberg

The dollar extended gains, while Treasuries retreated as bets increased that the Federal Reserve will raise rates in two weeks. US stocks fell from records as a torrid run in bank shares ended.
Lenders led declines a day after reaching the highest level since 2007, while energy producers slipped with the price of crude. Data showing U.S. jobless claims fell to a 44-year low bolstered arguments that growth is robust enough to warrant higher borrowing costs. The greenback headed for the longest winning streak since May and gold retreated with bonds as Lael Brainard became the latest Fed official to support the case for tightening “soon.”
A day after strong Chinese and American factory data, reports showed a pickup in European inflation and a tighter US jobs market, providing hard numbers to backup surging sentiment readings. Rate doves got some cover, though, as the Atlanta Fed lowered its GDPNow forecast to 1.8 percent amid slower consumer spending growth.“The data has been really strong and it’s quite hard arguing for waiting,” Trevor Greetham, head of multi-asset at Royal London Asset Management, told Bloomberg TV’s Francine Lacqua. “Interest rates are just too low given the momentum in the economy and the low unemployment rate.”

Upcoming events that traders are
looking out for:
Janet Yellen gives an address on the economic outlook on Friday in Chicago. The Chinese People’s Political Consultative Conference, an advisory body of more than 2,000 political elites, business executives and others, opens its annual session in Beijing on March 3.

Here are the main moves in markets:
Stocks
The S&P 500 Index fell 0.3 percent to 2,388.86 as of 10:38 a.m. in New York, following a 1.4 percent rally on Wednesday. Snap Inc. was indicated to open at $21 a share in its trading debut after its initial offering priced at $17. The Stoxx Europe 600 Index was little changed at 8:17 a.m. in New York, slipping from a 15-month high hit earlier in the session.
Consumer-related shares fell, led by Luxottica Group SpA after the company published a profit outlook for 2017 that was shy of analyst expectations. Utilities shares rallied after Engie SA said it sees earnings growth this year. Asian shares surged. Tokyo stocks jumped to the highest since December 2015, Australia’s benchmark rose 1.3 percent, the most since November and the Jakarta Composite Index had its biggest advance this year.

Currencies
The Bloomberg Dollar Spot Index added 0.5 percent, climbing for a fifth straight day. It’s at the highest level since Jan. 20. Canada’s dollar weakened 0.4 percent as crude slipped, overshadowing faster-than-forecast economic growth last quarter. The euro slipped for a third day, falling 0.4 percent to $1.0504. The yen fell 0.6 percent to 114.44 per dollar, after declining 0.9 percent Wednesday.
Bonds
Yields on 10-year Treasuries rose two basis points to 2.48 percent, after climbing six basis points Wednesday. A record number of fed funds futures changed hands Wednesday as traders scrambled to guard against a rate increase in two weeks. France’s 10-year bonds outperformed their German peers for a second day as investors looked past political risk and showed strong demand at an auction of 50-year debt. German 10-year yields rose two basis points to 0.30 percent, the highest since Feb. 21.

Commodities
Gold dropped 0.8 percent to $1,239.60 an ounce. The metal was at the highest level in more than three months on Feb. 24. Oil retreated for a third day, its longest slide in two months, as record-high U.S. stockpiles were seen jeopardizing OPEC’s efforts to drain a global surplus.
West Texas Intermediate oil retreated 1.8 percent to $52.86 a barrel. The higher dollar sent all base metals lower.