Dollar Weakens as Treasuries Gain Before GDP; Copper Retreats

New York (May 29)  The dollar weakened and Treasuries rose before a report expected to show the U.S. economy shrank last quarter. European shares traded close to a six-year high, copper dropped and French bond yields fell to a record low.

The Bloomberg Dollar Spot index declined 0.2 percent to 1,011.26 at 7:31 a.m. in New York. The yield on 10-year Treasuries fell 1 basis point after earlier reaching the lowest since July. The Stoxx Europe 600 Index was little changed and Standard & Poor’s 500 Index futures rose 0.1 percent. Copper dropped 0.8 percent. French 30-year yields fell as much as two basis points to 2.762 percent. Austrian five-year yields and Belgium’s 10-year rate also reached record lows.

U.S. gross domestic product contracted 0.5 percent in the first quarter, according to economists surveyed by Bloomberg. Government securities advanced across Asia, following a rally yesterday that drove the yield on the Bloomberg Global Developed Sovereign Bond Index to the lowest since May 2013. All 26 bond markets from Hungary to Japan tracked by Bloomberg and the European Federation of Financial Analysts Societies rose this month through yesterday.

“There really is no precedent for so many countries to have such low yields,” Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a report. “These truly are remarkable times.”

The Stoxx 600 closed at its highest level since January 2008 on May 27. It’s gained 2 percent in May, poised for a second monthly advance.