Oil is languishing in a bear market, with the International Energy
Agency predicting the lowest demand growth since 2009, even as U.S.
supplies rise.
Brent decreased 1 percent to $84.23 a barrel at 6:30 a.m. in New York. Germany’s 10-year yield dropped as low as 0.81 percent. The Stoxx Europe 600 Index fell 0.6 percent, with Shire Plc (SHP) tumbling as much as 29 percent after AbbVie Inc. reconsidered a takeover bid, and Standard & Poor’s 500 Index futures were little changed. Currencies of oil-producing nations declined.
Oil is languishing in a bear market, with
the International Energy Agency predicting the lowest demand growth since 2009. Data in the U.S. will probably show retail sales fell 0.1 percent in September after China reported weaker-than-estimated consumer inflation.
“There’s a chill in the global markets,” Paul Mortimer-Lee, chief economist for North America at BNP Paribas SA in New York, wrote in a note to investors. “There are lots of contributory factors to this unease.”
The Bloomberg Commodity Index (BCOM) of 22 raw materials fell to the lowest since July 2009, as Brent dropped to the lowest since Nov. 24, 2010, and West Texas Intermediate oil slipped 1.8 percent to a more than two-year low of $80.41 a barrel.
A rig hand removes drill pipe from a natural gas well at a hydraulic fracturing site... Read More
Government bonds are rallying as sliding energy prices dim inflation prospects, preserving the value of payments on fixed-income assets. France’s 10-year yield fell to a record 1.16 percent.
Treasury Yields
Treasury 10-year notes were little changed, with the yield at 2.2 percent after touching 2.17 percent yesterday, the least since June 2013. A Treasury market gauge of inflation expectations fell to the lowest in 15 months at 1.90 percentage points today.The Norwegian krone reached 6.6505 per dollar, the weakest level since June 2010. Norway is western Europe’s biggest crude producer.
Canada’s dollar weakened to the lowest level since July 2009 on concern tumbling oil prices may endanger development of the nation’s largest export and the business investment needed to drive economic growth.
“Renewed weakness in the Canadian dollar has been triggered by the ongoing sell off in the crude oil market,” Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London, wrote in an e-mailed note today. “It clearly poses downside risks for currencies from net oil producers.”
Retail Sales
A report at 8:30 a.m. in Washington may show U.S. retail sales fell in last month, following a 0.6 percent gain in August, according to economists surveyed by Bloomberg. The Federal Reserve releases its Beige Book report of regional anecdotal information about the U.S. economy after European markets close today.China’s consumer prices increased 1.6 percent in September from a year earlier, missing the 1.7 percent median estimate of economists in a Bloomberg survey, data from the National Bureau of Statistics in Beijing showed.
The Stoxx 600 dropped for a seventh straight day, the longest streak since August 2011. Health-care companies slumped the most among 19 industry groups, losing 2.3 percent.
The Euro Stoxx 50 Index (SX5E) of the biggest companies in the euro area fell 10 percent since its almost six-year high in June.
Shire Casualty
AbbVie’s board will meet Oct. 20 to consider scrapping the drugmaker’s planned $51.5 billion acquisition of Shire in what would be the biggest casualty of the U.S. crackdown on so-called tax inversions. AstraZeneca Plc (AZN), for which Shire abandoned a takeover bid in May, lost 3.5 percent.Balfour Beatty Plc (BBY) jumped 8.5 percent after Britain’s biggest builder named Leo Quinn as new chief executive officer. Danone climbed 3.2 percent after the world’s biggest yogurt maker reported third-quarter sales that topped analysts’ estimates, reinforcing its prediction of a return to profitable growth in the second half of the year.
Intel Rises
Intel Corp. (INTC) rose 1.7 percent in early New York trading after the world’s largest computer-chip maker forecast fourth-quarter sales that may exceed analysts’ estimates as companies snap up personal computers with newer, faster machines.Bank of America Corp., BlackRock Inc., Netflix Inc., EBay Inc. are among companies reporting quarterly results today.
The MSCI All-Country World Index fell 0.2 percent for a fifth daily decline, extending its lowest level since February. The MSCI Asia Pacific Index (MXAP) climbed 0.3 percent, rebounding from a six-month low.
The MSCI Emerging Markets Index slipped 0.2 percent. Russia’s Micex Index (INDEXCF) declined 0.6 percent and the ruble weakened 0.2 percent to 41.9945 per dollar, after reaching a record low 41.0475.
Russian currency interventions reached $7 billion this month as the central bank seeks to slow the biggest depreciation among currencies worldwide after sanctions over Ukraine shut companies out of foreign debt markets. The ruble has depreciated 17 percent since June. Oil and natural gas make up about half of government revenue.
The Hang Seng China Enterprises Index (HSCEI) of mainland companies traded in Hong Kong rallied 0.3 percent, after yesterday capping a decline of more than 10 percent from its peak in September. The Shanghai Composite Index (SHCOMP) gained 0.6 percent.
Hong Kong police used pepper spray and batons to retake a key road in seeking to end an occupation of parts of the city by pro-democracy protesters.
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