Azernews.Az

By Bloomberg

The dollar weakened and Treasuries rose after retail sales climbed less than analyst estimated, easing speculation the Federal Reserve will rush to raise interest rates. Emerging-market shares fell for the first time in 12 days, led by Chinese shares in Hong Kong.

The Bloomberg Dollar Spot Index slid 0.3 percent at 8:34 a.m. in New York. The yield on 10-year Treasuries dropped five basis points to 1.88 percent. Standard & Poor’s 500 Index futures slipped 0.2 percent and the Stoxx Europe 600 Index lost 0.2 percent. The MSCI Emerging Markets Index fell 0.5 percent. U.S. oil advanced for a fourth day in New York.

Retail sales increased 0.9 percent in March, less than the 1.1 percent forecast in a Bloomberg survey, Commerce Department data showed after companies including JPMorgan Chase & Co., Johnson & Johnson and Wells Fargo & Co. reported results. Analysts have cut earnings projections for S&P 500 companies, predicting a 5.6 percent decline in the first quarter and a slump through September amid concern that a stronger dollar and tumbling oil prices are hurting results.

“We’re starting to hit the reporting season which is going to be a major driver for the next few weeks,” said Peter Dixon, a global equities economist at Commerzbank AG in London. “The market is not looking for a good set of numbers as demand has been hit by a stronger dollar. Fundamentally, a strong economy should be good for markets and that rate hike is going to come at some point anyway.”

The value of global equities rose to an all-time high this month as central-bank stimulus from Europe to Asia helped boost demand for shares amid mixed economic reports and speculation the U.S. will delay interest-rate increases.

S&P 500 E-mini futures fell after the index declined the most in almost two weeks on Monday. JPMorgan gained 1 percent in early New York trading, while Johnson & Johnson and Wells Fargo were little changed after earnings topped estimates. Intel Corp. reports results later today.

Alcatel Rallies

In Europe, Alcatel-Lucent SA jumped 14 percent, the most since October, as Nokia Oyj is in advanced talks to buy it. Shares of the Finnish equipment maker fell 3.9 percent, while rival Ericsson AB climbed 1.2 percent.

The cost of insuring Alcatel-Lucent’s debt decreased 37 basis points to 154 basis points, the lowest since July 2007, according to data compiled by Bloomberg. Credit-default swaps on Nokia rose as much as 12 basis points to a five-week high of 116.5 basis points. The difference is the smallest in more than a year.

Kuehne & Nagel International AG lost 2.8 percent as the world’s biggest sea-freight forwarder’s first-quarter operating profit failed to grow.

Emerging-market stocks fell after longest winning streak in 10 years sent valuations to the highest level since 2010. Shares in Russia, Turkey and Hungary dropped at least 1 percent.

China Slowdown

Hong Kong’s Hang Seng China Enterprises Index halted an eight-day rally, while Shanghai Composite Index advanced 0.3 percent. China’s first-quarter economic growth probably slowed to 7 percent, the slowest pace since the first quarter of 2009, economists said in a Bloomberg survey before a report on Wednesday.

Germany’s 10-year bund yield declined as much as two basis points to 0.134 percent. France’s 10-year rate dropped to 0.407 percent, buoyed by the European Central Bank’s bond-purchase program. Yields on Austrian, Belgian, Finnish and Irish securities also fell to records.

BlackRock’s Offering

BlackRock Inc. is planning to sell its first bonds in euros as the world’s largest asset manager takes advantage of falling borrowing costs. Average yields on investment-grade corporate bonds in Europe fell to a more than four-week low of 0.87 percent, Bank of America Merrill Lynch index data show. Yields reached a record 0.85 percent on March 10.

Singapore’s currency strengthened 0.6 to S$1.3627 per dollar after the city’s central bank said it will “maintain the policy of a modest and gradual appreciation” without adjusting the pace of its currency’s moves.

West Texas Intermediate crude traded 0.9 percent higher at $52.39 a barrel in New York, and earlier touched $52.67. Shale output will decline in May, the U.S. Energy Information Administration said, the first time the agency forecast a drop since it began issuing monthly data in 2013.

Talks between world powers and Iran over a nuclear deal may need to be extended for a third time beyond a June 30 deadline. Brent crude rose 0.7 percent to $58.32 in London trading, also advancing for a fourth session.

Gold fell for a second day, retreating 1.2 percent to $1,184.75 an ounce, after earlier Tuesday reaching the lowest since April 1 before the release of U.S. retail sales data that may strengthen the case for higher borrowing costs.

Industrial metals dropped, with lead declining 1.4 percent and copper 1.3 percent on the London Metal Exchange.