Stocks Rise, Treasuries Fall as Dollar Fluctuates: Markets Wrap

New York (Mar 30)  U.S. stocks extended a sixth straight quarterly advance as central bank officials in Europe and the U.S. signaled divergent policy paths. The dollar edged higher after briefly erasing gains on Trump administration rhetoric against currency manipulators.

Banks led gains in the S&P 500 Index, as it the benchmark for American equity heads for a quarterly gain of more than 5 percent. The greenback dipped after CNBC cited unnamed sources that multiple U.S. agencies were looking into currency penalties. The dollar earlier 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.

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.

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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 climbed 0.4 percent to 2,370.15 at 11:01 a.m. in New York, the highest since March 20. The benchmark gauge erased a decline 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 0.4 percent to $1.0725, after declining 0.9 percent over the previous two days. The British pound rose 0.2 percent to $1.2456.
•The Bloomberg Dollar Spot Index was unchanged after earlier rising 0.2 percent and the rand strengthened 1.3 percent.

Bonds
•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.
•Yields on 10-year Treasuries climbed one basis point. The rate fell four basis points on Wednesday after rising the same amount in the previous session.

Commodities
•West Texas Intermediate crude rose 0.6 percent to $49.78 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.

Source: Bloombeurg