Dollar and oil retreat along with European shares: Markets wrap

Bloomberg.- The dollar dropped the most in two weeks while oil retreated from its highest close in 17 months as investors prepared to close out a volatile year for financial markets. European stocks slid from a 2016 peak.

The Bloomberg Dollar Spot Index fell for the first time in four days, with the U.S. currency declining against almost all its major peers. The strengthening yen sent Japan’s Topix to its biggest drop in more than a month, while European shares extended losses for 2016. Crude in New York slipped for the first time in nine days, threatening to halt the longest winning streak since 2010. Gold extended gains. The S&P 500 Index fell the most since October on Wednesday as data showed a decline in pending U.S. home sales.

Trading has been thin across the globe during the last week of the year, with volumes in crude oil, equities and currencies all below average. Investors sold U.S. equities at the fastest rate since before Donald Trump’s surprise election, trimming a post-election rally that took major indexes to all-time highs. The dollar is retreating after rising to the highest level in more than a decade on speculation the incoming president will boost public spending.

“The U.S. dollar depreciated against all of the G-10 and the majority of the emerging market currencies on the back of an unexpected 2.5 percent month-on-month drop in pending home sales in November,” said Ipek Ozkardeskaya, a markets analyst at London Capital Group Ltd. in a note to clients. “The data pushed the exhausted U.S. bulls to the sidelines.”

Currencies

– The Bloomberg Dollar Spot Index slipped 0.4 percent at 7:19 a.m. in New York after trading Wednesday at the highest level in more than a decade.
– The euro was up 0.4 percent, while the yen rose 0.6 percent, the most since Dec. 19. The Australian dollar climbed 0.5 percent and the New Zealand dollar strengthened 0.4 percent.

Stocks

– The Stoxx Europe 600 Index lost 0.2 percent, after closing at the highest level in a year on Wednesday. The gauge is down 1.4 percent for 2016.
– Trading volume in Europe is about half the 30-day average. Cyclical shares including banks, carmakers and miners — among the best performers in the final quarter of the year amid bets for stronger economic growth — fell the most.
– The MSCI Asia Pacific Index added 0.1 percent after breaking a string of six consecutive losses on Wednesday.
Japan’s Topix slid 1.2 percent. The benchmark is heading toward a loss of 1.9 percent for the year, its first annual – decline in five years. The Nikkei 225 Stock Average pared its gain for 2016 to 0.6 percent.
– The Jakarta Composite Index jumped 1.8 percent, bringing its three-day rally to 5.5 percent and erasing a two-week selloff.
– Australia’s S&P/ASX 200 advanced 0.3 percent to the highest level in more than a year.
– Futures on the S&P 500 were little changed. The benchmark index fell 0.8 percent on Wednesday. It’s up 10 percent in 2016 after adding 2.3 percent so far this month.

Commodities

– Crude futures in New York slid 0.2 percent to $53.96 a barrel as an industry report was said to show U.S. stockpiles climbed last week. Crude settled at $54.06 on Wednesday, the highest close since July 2015.
– Gold rose for a fourth session, adding 0.5 percent to $1,147.18. The metal has been rebounding from an 11-month low.

Bonds

– U.K. gilts led European bonds higher. Yields fell six basis points to 1.23 percent.
– The yield on German 10-year bunds fell one basis point to 0.18 percent, while those on Treasuries dropped two basis points to 2.48 percent, extending Wednesday’s decline of five basis points.
– Australia’s 10-year yield slid seven basis points to 2.78 percent.

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