Dollar Falls After Fed Flags Currency's Gains as Drag on Economy

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The dollar fell as minutes from the Federal Reserve’s latest meeting showed officials discussed how the strong U.S. currency was damping inflation and exports.

The greenback slumped versus all but one of its 16 major peers as the release from the Sept. 16-17 gathering noted that the dollar has “strongly appreciated” against emerging-market counterparts and climbed versus currencies of commodity exporters and the main U.S. trading partners. The Fed held rates near zero last month after slowing Chinese growth roiled global markets in August.

An appreciating dollar tends to restrain the U.S. economy by making American products more expensive abroad, while keeping down inflation by making imports less costly.

The dollar fell 0.4 percent to $1.1277 per euro as of 3:28 p.m. in New York. The Bloomberg Dollar Spot Index, which tracks the currency versus 10 of its major peers, lost 0.4 percent.

Money has flooded into dollar assets over the past 12 months in anticipation of the Fed’s first interest-rate increase in almost a decade. That’s boosted the central bank’s trade-weighted broad dollar index to its strongest since 2003.

Source: Bloomberg

Crude Oil Surges Above $50 a Barrel for First Time Since July

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Oil surged above $50 a barrel in New York for the first time since July on speculation that demand is picking up.

West Texas Intermediate futures rose as much as 4.7 percent. A "new capital discipline" in the industry will allow demand to catch up with supplies, boosting prices, according to Gary Ross, founder and chairman of PIRA Energy Group. Demand will climb more this year than previously projected amid cheaper fuel prices, OPEC Secretary-General Abdalla Salem El-Badri said yesterday in a statement to the International Monetary Fund.

Oil has traded below $50 a barrel after prices slumped to a six-year low in August amid speculation a global glut will persist through next year. U.S. stockpiles remain about 100 million barrels above the five-year average and the Organization of Petroleum Exporting Countries continues to pump more than its quota.

WTI for November delivery rose $1.62 to settle at $49.43 a barrel on the New York Mercantile Exchange after touching $50.07. Brent for November settlement advanced $1.85 to $53.18at 2:42 p.m. on the London-based ICE Futures Europe exchange.

Sorce: Bloomberg

Asian Futures Signal More Stock Gains to Come With Oil Near $50

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Asian index futures foreshadowed another day of gains for the region’s stocks, with global equities on track for their best week since 2012 amid a bounce back in oil. No such luck for the dollar, which is languishing near a three-week low versus major peers after minutes of the Federal Reserve’s last meeting showed officials discussed how the currency’s strength was damping inflation and that growing global risks spurred them to stand pat on hiking interest rates in September. Copper futures rallied.

The S&P/ASX 200 Index gained 0.6 percent at the open in Sydney, set for a weekly climb of 3.7 percent, while New Zealand’s S&P/NZX 50 Index, the first major stock index to start trading each day in the Asian region, climbed 0.6 percent, headed for a 1.2 percent advance in the week.

Nikkei 225 Stock Average futures were up 0.8 percent to 18,250 in the Osaka pre-market.

Futures on the Hang Seng and Hang Seng China Enterprises indexes in Hong Kong rose at least 0.3 percent. Chinese markets resumed trading Thursday for the first time in a week, with the Shanghai Composite Index’s 3 percent advance underwhelming investors who had seen the Enterprises gauge, which tracks mainland stocks listed in Hong Kong, climb 11 percent in the period China was out.

While FTSE China A50 Index futures rose 0.8 percent in recent trade, the biggest U.S. exchange-traded fund tracking Chinese shares fell Thursday in New York, dropping 1.3 percent from a seven-week high as slowdown concerns reasserted themselves.

Markets in Taiwan and South Korea are closed for holidays Friday, with Australian home loan data due and the Philippines due to report on exports. Thailand will update on its foreign reserves.

Source : Bloomberg

U.S. Stocks Advance Amid Fed Minutes as Commodity Shares Rally

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U.S stocks rose as Federal Reserve minutes reflected caution over raising interest rates even as the economy improves, further boosting commodity producers.

The minutes kept expectations for higher rates pushed into next year, weakening the dollar and boosting energy, raw-material and industrial companies amid speculation that a weaker U.S. currency will lift their profits. Those three industry groups rallied at least 1.4 percent Thursday.

The Standard & Poor’s 500 Index added 0.9 percent to 2,013.40 at 4 p.m. in New York, rising above a level where recent rallies had stalled.

The Fed’s decision on September 17 to not raise interest rates jolted investors, as the central bank cited global market turmoil and a slowdown in China as reasons for standing pat. Equities slid in seven of eight sessions after the meeting, with the S&P 500 losing 5.7 percent.

Commodity producers and industrial shares have had their strongest rallies in years while the dollar has slumped since the weaker-than-forecast September jobs report set back expectations for higher rates. The Bloomberg Dollar Index is headed toward a three-week low. Industrials benefit from the weaker currency when their overseas earnings are converted back to dollars, while commodities denominated in a lower U.S. currency are more attractive.

A report today showed filings for unemployment benefits declined last week to the lowest level since mid-July, extending a run of applications near decade lows that shows dismissals remain in check. Managers are reluctant to trim staffing levels because domestic demand is holding up in the face of diminished global growth expectations.

Source: Bloomberg

European Stocks Advance on Day of Ups and Downs as Autos Climb

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On a day when Europe’s equity benchmark swung between gains and losses at least 25 times, an advance in carmakers helped it close higher.

Auto-related shares posted the best performance of the 19 industry groups on the Stoxx Europe 600 Index, rising for a fourth day. Daimler AG added 1.2 percent. Fiat Chrysler Automobiles NV rose 3.9 percent after reaching a tentative agreement with the United Auto Workers union in the U.S. to avert a strike. Credit Suisse Group AG led banks lower, sliding 3.6 percent after the Financial Times reported that the Swiss lender is preparing a substantial capital raising plan.

The Stoxx 600 added 0.2 percent to 361.61 at the close of trading, after earlier rising as much as 0.3 percent and falling 0.6 percent. The gauge also struggled to sustain an intraday advance yesterday, after rallying the previous two sessions. Investors are awaiting company earnings announcements and minutes of the Federal Reserve’s September meeting -- due after market close -- for further cues on corporate and economic health. The equity measure had tumbled as much as 18 percent from an April record through Sept. 29 amid uncertainty over the trajectory of U.S. borrowing costs and China-fueled worries about global growth.

Shares fell earlier after a report showed that German exports slumped in August the most since January 2009, evidence that Europe’s largest economy isn’t immune to the effects of weakening global trade. In a further sign of euro-area strain, French business confidence unexpectedly worsened.

Among stocks moving on corporate news, Koninklijke DSM NV rose 4.1 percent after ABN Amro Group NV upgraded its rating on the life sciences company to buy from sell, citing expectations of improved earnings.

Telefonica SA contributed the most to a decline in a gauge of telecommunications stocks, retreating 1.3 percent after U.K. regulators reportedly expressed concern that the sale of its O2 unit could lead to a decline in service and higher prices.

Coloplast A/S fell 4.1 percent after UBS Group AG cut its recommendation to sell from neutral, citing overly optimistic estimates for growth in two of the company’s main businesses.

Seadrill Ltd dropped 5.3 percent after the offshore driller’s chief executive officer said 2016 would be “ugly,” with a recovery possibly starting in 2017 depending on oil prices. Norsk Hydro ASA fell 2.5 percent.

Deutsche Bank AG lost 1.8 percent. Shares swung between gains of as much as 3.1 percent and a 3.6 percent loss as investors weighed the potential elimination of its dividend against the likelihood that such a move would allow the lender to overhaul its structure without seeking more capital from shareholders.

Source : Bloomberg