Dollar gains as oil declines before decision on Iran deal

Bloomberg

The dollar rallied while oil dropped as traders braced themselves for President Donald Trump’s decision on the Iran nuclear deal. Stocks were little changed in the US and Europe.
The greenback strengthened for a third session as Federal Reserve
Chairman Jerome Powell stuck with a message of gradual tightening. Italian shares tumbled on the prospect for fresh elections that may boost the chances of a populist government taking power. West Texas crude fell toward $70 a barrel after reaching the highest since 2014.
A drop in utility and telecom stocks on the S&P 500 Index was blunted by gains for banks. US stocks got some support from executives at Caterpillar Inc., who said at a conference that an infamous “high water mark” comment last month wasn’t meant to suggest that markets were peaking. Ten-year Treasury yields approached 3 percent after JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon warned a climb to 4 percent may be in the offing.
Worries about pricey stocks and rising borrowing costs that have roiled developed markets are migrating to the developing world, where higher Treasury yields and a stronger dollar could sap demand for emerging-market assets. Trump’s foreign policies have further complicated the picture by stoking volatility in commodities. He was expected to announce on Tuesday whether the US will pull out of a nuclear accord with Iran, potentially disrupting supplies from OPEC’s third-largest producer.
“Our take is that no matter what gets announced, that will just be the beginning of negotiation,” Lori Heinel, the deputy global chief investment officer at State Street Global Advisors, said in an interview at Bloomberg’s New York headquarters. “And as long as there’s a certain amount of negotiation, the chances of an extreme outcome, an extreme collapse in supply for example, is off the table.”
President Trump disclosed his Iran decision on Tuesday in Washington. He has decided to withdraw from the landmark Iran nuclear accord, according to a US official. Japanese PM Shinzo Abe hosts South Korean President Moon Jae-in and Chinese Premier Li Keqiang. There’s a Bank of England policy decision on Thursday. US inflation data for April is due the same day. Some of the company earnings due include Walt Disney, Petrobras, Marriott, Toyota, Ambev and Deutsche Telekom.
The S&P 500 Index slipped less than 0.1 percent in New York The Stoxx Europe 600 Index was little changed. The MSCI Asia Pacific Index added 0.3 percent to the highest in a week. Japan’s Nikkei 225 Stock Average rose 0.2 percent. The MSCI Emerging Market Index rose 0.1 percent.
The Bloomberg Dollar Spot Index climbed 0.4 percent to the highest this year. The euro declined 0.6 percent to $1.1854, the weakest since December. The British pound fell 0.4 percent to $1.3506, the weakest in more than four months. The Japanese yen fell 0.1 percent to 109.24 per dollar.
The yield on 10-year Treasuries rose two basis points to 2.97 percent. Germany’s 10-year yield climbed three basis points to 0.56 percent. Britain’s 10-year yield increased four basis points to 1.44 percent.
West Texas Intermediate crude decreased 1.4 percent to $69.77 a barrel, the first retreat in a week. Gold fell 0.4 percent to $1,308.64 an ounce.