Futures Gain as Bonds Slump Before Trump Sworn In

EghtesadOnline: U.S. futures climbed with the dollar and bonds fell as investors await the start of Donald Trump’s presidency.

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20 January 2017

Yields on U.S. Treasuries due in a decade climbed to their highest level in almost three weeks. The pound slid after a report showed U.K. retail sales fell at the fastest pace in almost five years last month. The Stoxx Europe 600 Index headed for its first weekly decline in a month while gold headed for a fourth weekly advance, Bloomberg reported.

The inauguration is “definitely a big moment for the markets,” said Neil Mellor, a London-based currency strategist at Bank of New York Mellon Corp. “We could get more clues about what Trump is planning today. If he ramps up the rhetoric the market will be concerned about building long dollar positions.”

Investors are avoiding taking firm positions before Trump is sworn in as the 45th American president as they await indications the the administration will follow through on pro-growth campaign promises. Billionaire investor George Soros said the euphoria among stock investors since Trump’s victory will end as uncertainty takes over. The Dow Jones Industrial Average has churned in its tightest range ever over the past month.

Here are the main market moves today:

Currencies

The Bloomberg Dollar Spot Index was up 0.2 percent as of 7:32 a.m. in New York after falling as much as 0.3 percent. The gauge is heading toward its first weekly advance since the period ending Dec. 23.

The pound dropped 0.4 percent to $1.2289 and the euro retreated 0.2 percent to $1.0642.

Stocks

The Stoxx Europe 600 Index traded little changed as declines in miners offset gains in energy shares.

Futures on the S&P 500 Index rose 0.2 percent. The underlying benchmark is heading for its biggest weekly drop of 2017. Contracts on the Dow Jones Industrial Average were little changed on Friday.

Commodities

West Texas Intermediate crude climbed for the second day, gaining 1.3 percent to $52.02 a barrel and narrowing a weekly loss to 0.7 percent.

Gold retreated 0.2 percent to 1,201.01 an ounce. The metal has advanced 0.4 percent this week, touching the highest level since November on Tuesday.

Bonds

The yield on 10-year Treasuries rose three basis points to 2.5 percent, their highest level since Jan. 3.

Government bonds retreated across the European Union. Yields on Irish 10-year notes climbed 5 basis points to 1 percent.