Treasuries gain with gold as US stocks retreat

epa03522471 Traders work on the floor of the New York Stock Exchange at the Opening Bell in New York, New York, USA, 02 January 2013. World financial markets jumped 02 December after US lawmakers agreed to a hard-won deal to head off the nation's looming fiscal crisis. Shares on Wall Street opened higher after a relief rally in Asia and Europe after the Republican-controlled US House of Representatives approved a bill to avoid tax hikes and postpone spending cuts that risked prompting a recession. New York's Dow Jones Industrial Average rose 2 per cent and Europe's benchmark Stoxx 600 index climbed 2.07 per cent to 285.49 points as the first trading session for the new year for many share markets got underway. EPA/JUSTIN LANE

 

Bloomberg

Treasuries rose for a fourth day and gold reached a three-month high as demand for haven assets persisted with investors assessing political risks in Europe and the US American equities slumped.
The S&P 500 Index extended a stretch of listlessness as disappointing bank results in Europe added to pressure on financial shares. Yields on 10-year Treasury notes fell to 2.34 percent, while bond auctions in Europe lifted debt in Germany and Portugal. Gold topped $1,240 an ounce, and crude fell on signs of oversupply. Bloomberg’s dollar index fell for the first time in three days.
Trades sparked by Donald Trump’s election continue to falter as long-awaited details on pro-growth policies remain undelivered. That’s driven demand for safety even as corporate results in Europe and America add to evidence that economic growth is accelerating. The calendar for data is light in the week.
“There is less macro and more micro driving the market because we are in the earnings season,” Lucy MacDonald, chief investment officer for global equities at Allianz Global Investors, said on Bloomberg Television. “But we haven’t had an election for a while and we know we have plenty coming up. The negative outcomes aren’t really priced in.”
A U.S. court of appeals is reviewing arguments on whether to reinstate the Trump administration’s temporary ban on immigration, with the outcome likely to be appealed to the Supreme Court. The U.S. Treasury Department is this week selling a total of $62 billion of three-, 10- and 30-year securities in its quarterly refunding. A strike looms at BHP’s Escondida mine. Workers at the world’s largest copper operation vowed to down tools indefinitely after wage negotiations with the company failed. The walkout will halt all production at the site.

Stocks
The S&P 500 Index fell 0.2 percent to 2,287.81 at 9:31 a.m in New York. Financial shares lost 1 percent as the rally in bonds threatened interest income. Walt Disney Co. led gains in the Dow Jones Industrial Average, though the 30-member gauge fell 0.2 percent as banks and industrial shares slipped. The Stoxx Europe 600 Index dropped 0.1 percent. GlaxoSmithKline fell after saying profit growth may be erased this year if rival drugmakers are allowed to start sell versions of its top-selling asthma medicine.
Currencies
The Bloomberg Dollar Spot Index fell 0.2 percent, extending a loss in 2017 to 2.5 percent. The euro strengthened 0.1 percent to $1.0697 and the British pound was little changed at $1.2516.
Commodities
Oil slid 1 percent to $51.67 a barrel in New York, heading for a third-straight drop amid speculation that rising supply from U.S. shale producers is offsetting cuts by OPEC. Copper three-month forwards jumped 1.8 percent after workers at the biggest mine in Chile vowed to strike. Goldman Sachs Group Inc. forecast what would be the first deficit of the metal since 2011. Gold climbed to the highest in almost three months as investors purchased metal through the biggest exchange-traded fund for a fifth day, the longest buying spree since June.

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