World Stocks, Commodities Fall; Dollar in Focus

Bikram Pandey
07 Oct, 2010
New York City

World financial markets are focused on the fate of the dollar after this weekend meeting. The dollar rebounded today but stocks and bonds struggled. The U.S. Treasuries yielded record low rates. Central banks in Europe and UK left rates on hold.

[R]4:30 PM New York – World financial markets are focused on the fate of the dollar after this weekend meeting. The dollar rebounded today but stocks and bonds struggled. The U.S. Treasuries yielded record low rates. Central banks in Europe and UK left rates on hold.[/R]

U.S. stocks traded sideways after weekly jobless claims fell 11,000 to 445,000. Investors are now awaiting the U.S. jobs report tomorrow. The dollar weakness continues to garner attention from investors as world leaders prepare to meet this weekend. The dollar rebounded from its low of $1.40 to a euro. Unemployment rate in September is expected to reach 9.7% from the 9.6% in August as businesses shun the hiring.

Robbins & Myers agreed to buy T-3 Energy for $422 million. Marathon inked deal to sell majority of Minnesota downstream assets for $900 million. PepsiCo revenue surged 40% to $15.5 billion.

U.S. stocks edged lower as the dollar bounced around. Retailers traded higher after the September same store sales were ahead of expectations. Abercrombie & Fitch and American Eagle Outfitters and Dillard gained. Immucor, Inc plunged 18% after it reported flat earnings.

Constellation Brands, Inc fiscal second quarter net increased 8% and sales edged up 2%. Helen of Troy Limited quarterly sales increased 7.8%. Immucor, Inc quarterly sales increased 1%. Marriott International, Inc returned to profit.

The European indexes gained after German industrial production accelerated in August. The ECB retained key rate at 1% for the seventeenth straight month. The EU outlined future financial sector taxation plans. French trade deficit widened in August.

The UK indexes rose after the BoE held key rate at 0.5% and quantitative easing at £200 billion. The UK home prices plummeted 3.6% in September and manufacturing output grew in August. BP and SOCAR signed deal to develop deepwater gas field in Azerbaijan.

Stocks in Japan moved in a very narrow range to close little changed pulled by the opposing movements of a stronger yen and easing on monetary policy. Foreign exchange reserve reaches a new record in September. Ruling party in Japan unveils the final stimulus plan.

Indian stocks fell sharply after the latest stubborn inflation data. The rupee edged higher the dollar declined all major currencies. IMF raises the GDP forecast for India to 9.7%. Cairn Energy seeks shareholder approval for Vedanta offer. Tea output drops in August due to pest attacks.

The Australian dollar gained more than 1% after the jobs report and the U.S. dollar weakness across all major currencies. The Aussie dollar surged to 27-year high and has rebounded 50% in the last two years. Construction activity and job vacancies drop in September.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.392 and gained against the Japanese yen to 82.38. One UK pound fetched $1.587.

Crude oil decreased $1.68 to $81.55 a barrel for a front month contract, natural gas edged lower 0.24 cent to $3.62 per mBtu and gasoline decreased 3.79 cents to 211.84 cents.

Gold decreased $10.90 in New York trading to close at $1,336.10 per ounce, silver fell $0.38 to $22.65 per ounce and copper for the front month delivery decreased 8.30 cents to $3.67 per pound.

Yields on 10-year U.S. bond yield decreased to 2.39% and on 30-year U.S. bond yield increased to 3.71%.