The yield on 10-year Treasury notes increased three basis points to 2.50 percent at 7:08 a.m. in New York. Two-year U.K. yields climbed five basis points after Bank of England Governor Mark Carney said officials may raise the benchmark rate in spring next year. The U.S. currency appreciated 0.1 percent to 106.17 yen. The Stoxx Europe 600 Index and Standard & Poor’s 500 Index futures rose less than 0.1 percent. The Bloomberg Commodity Index declined 0.3 percent as copper slid 0.8 percent. Russia’s Micex Index jumped 1 percent.
Treasuries declined after research by the Federal Reserve Bank of San Francisco suggested investors may be underestimating how
quickly policy makers could raise key borrowing costs. Bonds in Europe fell amid debt sales as traders scrutinized speeches by policy makers for signs of the extent of European Central Bank stimulus. Ukraine’s defense ministry said rebels kept shelling its positions in the country’s east as the European Union delayed additional sanctions on Russia over the conflict.
“It’s very supportive for the dollar that Treasury yields are now heading higher,” said Michael Sneyd, a foreign-exchange strategist at BNP Paribas SA in London. “When we had good data before, geopolitical risks kept yields down. Now that they are rising, the stars are aligning for the dollar.”
Currency Rates
The yield on three-year Treasury notes climbed as high as 1.035 percent, the highest since July 31. The U.S. is scheduled to auction $61 billion of notes and bonds over the next three days, starting with 2017 notes today.German 10-year yields rose four basis points to 0.99 percent and the rate on similar-maturity Italian debt climbed four basis points to 2.33 percent. Euro-area bonds rallied last week, sending yields to record lows, as the ECB unexpectedly cut interest rates and said it planned to buy asset-backed securities.
Futures (SPX) on the S&P 500 expiring this month were little changed after the index dropped the most in a month yesterday, slipping from a record.
Annie’s Inc. jumped 37 percent in German trading after General Mills Inc. said it will buy the California company for $820 million.
Apple Announcement
Apple Inc. climbed 0.8 percent as bigger-screen iPhones, a wearable device and a mobile payments system are set to be announced today, said people with knowledge of the matter.The Stoxx 600 was little changed after declining 0.8 percent in the past two days. The U.K.’s FTSE 100 Index slipped 0.2 percent, down for a third day. A poll before the Sept. 18 Scottish referendum showed today that 38 percent of respondents said they would vote for independence, up from 32 percent, while 39 percent favored status quo.
ABB Ltd. rose 1.9 percent after the world’s biggest maker of power grids said it will buy back shares for $4 billion. Telecom Italia SpA added 3.3 percent as America Movil SAB said it plans to enter talks to make a joint bid with Oi SA for the Italian company’s wireless unit in Brazil.
L’Oreal SA (OR) dropped 1.8 percent after a report that it sees lower-than-forecast market growth. Gamesa Corp. Tecnologica SA slipped 3.2 percent as it is raising funds through a share sale.
The MSCI All-Country World Index slipped 0.3 percent for a second day of losses. The MSCI AC Asia Pacific Index (MXAP) dropped 0.3 percent today, a fourth consecutive day of declines.
Corporate borrowing
European banks are taking advantage of investor demand for risky debt by selling notes designed to absorb losses in a crisis. Nordea Bank AB is the first Swedish lender marketing additional Tier 1 debt, while HSBC Holdings Plc and France’s Credit Agricole SA are also planning to sell securities this week.The MSCI Emerging Markets Index fell 0.4 percent, declining for a fourth day in the longest losing streak since Aug. 8. Benchmark gauges in India, Indonesia, Turkey and Poland slipped at least 0.5 percent. The South African rand declined 0.7 percent and Turkish lira fell 0.8 percent. A gauge of 20 emerging market currencies dropped for a second day, falling 0.2 percent to a seven-month low.
Ukraine Yields
Russian stocks rose while the ruble was little changed against the dollar. Ukraine’s July 2017 Eurobond fell for a second day, sending the yield four basis points higher to 12.23 percent.EU governments put on hold for at least a “few days” new sanctions against Russia, allowing more time to assess the viability of the cease-fire in Ukraine. The bloc’s 28 governments approved the measures in principle, stopping short of allowing their publication in the Official Journal and entry into force.
(The move in S&P 500 futures was corrected in a previous version of this story.)
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