U.S. Stocks Climb With Dollar as Treasuries Slip: Markets Wrap

U.S. stocks added to a sixth straight quarterly gain, the dollar advanced and Treasuries fell as central bank officials in Europe and the U.S. signaled divergent policy paths. Oil topped $50 a barrel in New York.

Financial shares paced gains in the S&P 500 Index, as the benchmark for American equity heads for a quarterly gain of more than 5 percent. The greenback rose as Fed speakers suggested rates may need to rise faster than the market currently anticipates, while the euro weakened and core European government bonds rose as investors weighed the prospect of the ECB sticking with its loose monetary policy. Ten-year Treasury yields rose above 2.40 percent.

While European central bank officials doused expectations policy makers were planning to withdraw monetary support, Fed officials shifted to a more hawkish tone, as the world’s biggest economy progresses toward goals for full employment and 2 percent inflation. Investors remained focused on Washington, where Republicans hinted they may revisit health-care reform, raising concern that tax cut attempts may take a back seat.

“The ECB is likely to tread very carefully in the coming months, and not adjust their forward guidance or tone significantly before they feel more comfortable about the economy and inflationary pressure,” Bas van Geffen, an analyst at Rabobank International, wrote in a note.

Here are key events the rest of this week:

Other Fed officials are scheduled to make appearances, including Bank of Cleveland President Loretta Mester and Bank of Dallas President Robert Kaplan.

Here are the major moves in the markets:

Stocks

-The S&P 500 rose 0.3 percent to 2,367.07 at 1:31 p.m. in New York, to the highest level since March 20. The benchmark gauge is flat in March and up 5.7 percent in the quarter.
-The Stoxx Europe 600 Index rose 0.5 percent after closing Wednesday at the highest since December 2015.
-The MSCI Emerging Market Index slipped 0.3 percent.

Currencies

-The euro fell 0.7 percent to $1.0694 for a third day of declines. The British pound rose 0.4 percent to $1.2477.
-The Bloomberg Dollar Spot Index added 0.2 percent, paring its worst quarterly retreat since March 2016.
-South Africa’s rand strengthened the most in emerging markets and government bonds rose as President Jacob Zuma was said to face mounting opposition to his plan to fire Finance Minister Pravin Gordhan.

Bonds

-Yields on 10-year Treasuries climbed three basis points to 2.41 percent. The rate fell four basis points on Wednesday after rising the same amount in the previous session.
-German bonds gained, with the yield on 10-year bonds dropping by around one basis point after inflation in Europe’s largest economy decelerated more than forecast in March.

Commodities

-West Texas Intermediate crude rose 1.6 percent to $50.278 a barrel after a report that OPEC is in talks to include all members in extending output cuts.
-Gold slipped 0.5 percent to $1,247.26 an ounce.

Asia

-Japan’s Topix fell 0.9 percent, while the Shanghai Composite dropped 1 percent, retreating for a fourth straight day.
-Australia’s S&P/ASX 200 index climbed for a third day to the highest since April 2015 as energy shares jumped.

Previously Posted on Bloomberg

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