Dollar Tantrum Screams Louder as Data Cast Doubt on Fed Timing

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The dollar fell to a three-month low as rising bond yields in Europe sapped demand for U.S. assets, creating a selloff Goldman Sachs Group Inc. compared to the “taper tantrum” the former Federal Reserve chairman initiated in 2013. Janet Yellen, the current Fed chair, added to the woes by saying long-term interest rates could jump when the central bank raises its benchmark rate, sending U.S. stocks and bonds lower.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, fell 0.7 percent to 1,160.75 at 5 p.m. in New York, the lowest on a closing basis since Feb. 5. The index slid 3 percent in April.

The dollar weakened 1.4 percent to $1.1347 per euro and declined 0.3 percent to 119.46 yen.

“Long-term interest rates are at very low levels,” Yellen said in response to a question after a speech in Washington Wednesday. “We could see a sharp jump in long-term rates” after liftoff. Most Fed officials predict they will raise rates this year for the first time since 2006.

Source : Bloomberg

Gold Sags as Yellen Cites Prospect for Sharp Jump in Bond Yields

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Gold fell for first time this week as Federal Reserve Chair Janet Yellen said bond yields “could see a sharp jump” after the central bank raises interest rates, crimping demand for the metal as an alternate investment.

Gold declined in the past two months as speculation mounted that the Fed’s benchmark rate would increase. Treasury yields have been held down by the three rounds of large-scale asset purchases that have swelled the central bank’s balance sheet by $4.47 trillion.

Higher borrowing costs cut gold’s allure because the metal generally offers returns only through prices gains, sending investors to assets with better yield prospects such as bonds. Traders are parsing economic data to assess the outlook for the timing of a rate increase. The government on May 8 releases statistics on jobs.

Gold futures for June delivery fell 0.2 percent to settle at $1,190.30 an ounce at 1:46 p.m. on the Comex in New York. Aggregate trading was 24 percent below the 100-day average, data compiled by Bloomberg show. The price rose 1.6 percent in the past two days.

Source: Bloomberg

U.S. Stocks Fall for Second Day As Growth Concerns After Data

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U.S. stocks fell, sending the Standard & Poor’s 500 Index to its lowest level in a month, as weaker-than-estimated data added to concerns about slowing growth before Friday’s government jobs report.

Apple Inc., Hewlett-Packard Co. and Microsoft Corp. dropped for a third session, weighing on technology shares. Alexion Pharmaceuticals Inc. tumbled 8 percent after agreeing to buy Synageva BioPharma Corp. for $8.4 billion, and Pfizer Inc. declined as health-care slumped. Devon Energy Corp. rose 1 percent after boosting its production forecast.

The S&P 500 Index fell 0.4 percent to 2,080.20 at 4 p.m. in New York, near its average price during the past 100 days.

Equities extended their declines after Federal Reserve Chair Janet Yellen said equity market valuations are quite high and could be a potential source of financial instability, in remarks on a panel in Washington.

Source: Bloomberg

U.S. Stocks Fall for Second Day Amid Growth Concerns After Data

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U.S. stocks fell, following the steepest decline for equities in more than a month, as weaker-than-estimated data added to concerns about slowing growth before Friday’s government jobs report.

The Standard & Poor’s 500 Index fell 0.5 percent to 2,079.78 at 1:00 p.m. in New York, after earlier rising as much as 0.4 percent. The Dow Jones Industrial Average declined 105.10 points, or 0.6 percent, to 17,823.10. The Nasdaq Composite Index lost 0.5 percent, while the Russell 2000 Index was little changed as biotechnology shares rallied.

Equities briefly extended their earlier declines after Federal Reserve Chair Janet Yellen said equity market valuations are quite high and could be a potential source of financial instability in remarks on a panel in Washington.

Source : Bloomberg