Dollar slumps, bonds rally as Trump disappoints: Markets wrap

Bloomberg.- The dollar slid and Treasuries gained with commodities as Donald Trump gave investors little reason to add to bets that his policies will spur growth in the world’s largest economy. U.S. stock futures slipped.

The greenback slumped against all major peers, sending it lower from a 14-year high reached last week on speculation a Trump administration will spur inflation. The 10-year Treasury yield touched the lowest since November as the president-elect gave scant details on policy proposals that prompted a post-election rout in bonds. Stocks looked set to retreat from record levels. Biotechnology firms across the globe sold off as Trump suggested drug prices were too high. Turkey’s lira climbed for the first time in six days.

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U.S. President-elect Trump’s press conference left investors with few specifics on the timing and scope of planned policies from infrastructure spending to trade pacts. Since his victory, the dollar and global equities have rallied, while bonds sold off, on bets inflation would pick up with growth. Health-care stocks were pressured Thursday as Trump said he’d force the pharmaceutical industry to bid for government business in the world’s largest drug market.

“The thing people were looking for was further context about fiscal spending plans and there wasn’t anything,” said Simon Derrick, chief currency strategist at Bank of New York Mellon Corp. in London, who recommends buying volatility. “Last year the market didn’t always get it right. It could be that it has misread what will happen this year as well.”

Currencies

– The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, fell 1 percent at 8:18 a.m. in New York.
– The euro strengthened 0.7 percent to $1.0656.
– Turkey’s lira jumped 2 percent to 3.7866 versus the dollar. The central bank is implementing measures to force banks to borrow at a higher rate, according to a person with direct knowledge of the matter.
– The South African rand led the biggest rally in emerging-market currencies since March after Deutsche Bank AG analysts said they’ve turned “fundamentally bullish” on the currency

Stocks

– The Stoxx Europe 600 Index lost 0.5 percent and the FTSE 100 fell 0.2 percent, halting a record streak of gains.
– Health-care shares headed for their biggest drop since November, deepening losses that began late yesterday
– Futures on the S&P 500 Index fell 0.3 percent. The underlying gauge increased 0.3 percent on Wednesday, staging an afternoon rally and recouping losses of as much as 0.4 percent.

Bonds

– The benchmark 10-year Treasury yield fell four basis points to 2.33 percent, touching the lowest level since Nov. 30.
– German 10-year yields dropped two basis points to 0.31 percent, while those in the U.K. slid five basis points to 1.30 percent.

Commodities

– Gold rose above $1,200 an ounce for the first time since November as the dollar sagged.
– Copper added 1.2 percent to $5,779 a metric ton, the highest in a month after Indonesia confirmed a halt to concentrate exports. Zinc rose 1.4 percent.
– West Texas Intermediate crude climbed 1.2 percent to $52.87 a barrel, extending its biggest rally in almost six weeks after government data published Wednesday showed U.S. refiners processed a record amount of crude.
– U.S. natural gas rose 2.6 percent to $3.31 per million British thermal units as a Bloomberg survey showed inventories probably fell by 141 billion cubic feet last week. U.K. natural gas rose 1.5 percent to 56.82 pence a therm, a fourth day of gains amid forecasts for cold weather.

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