U.S. dollar, yields rise; oil backs off two-month highs – Metro US

U.S. dollar, yields rise; oil backs off two-month highs

By Lewis Krauskopf

NEW YORK (Reuters) – The U.S. dollar gained for a third straight session against a basket of currencies and U.S. Treasury yields rose on Monday as investors sought to zero in on the path of interest rates, while oil prices pulled back from roughly two-month highs.

MSCI’s gauge of stocks across the globe gained 0.12 percent, near two-month highs, as U.S. equities pushed modestly higher.

Investors were parsing the significance for financial markets from Friday’s strong U.S. jobs report, which came on the heels of the Federal Reserve saying it would be patient on future rate hikes amid a cloudy outlook for the U.S. economy.

The dollar index, which measures the greenback against a basket of currencies, rose 0.3 percent, while benchmark U.S. 10-year Treasury notes last fell 9/32 in price to yield 2.7235 percent, from 2.691 percent late on Friday.

“People are still trying to figure out between what the Fed said last week and what the data said last week, what the path for U.S. rates is going forward,” said Willie Delwiche, investment strategist at Baird in Milwaukee.

On Wall Street, the Dow Jones Industrial Average rose 38.24 points, or 0.15 percent, to 25,102.13, the S&P 500 gained 8.65 points, or 0.32 percent, to 2,715.18 and the Nasdaq Composite added 65.50 points, or 0.9 percent, to 7,329.36.

Technology was the biggest riser among the S&P 500 sectors, as a busy fourth-quarter earnings season was set to continue later on Monday with Google parent Alphabet’s report.

S&P 500 companies are barely expected to eke out an increase in profits for the first quarter of 2019.

“As the fourth quarter numbers are coming in, I think there is a concern around slowdown in the first quarter,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

The pan-European STOXX 600 index rose 0.06 percent as the heavyweight banking sector fell following poor results from Julius Baer.

European investors were grappling with concerns about the euro zone economy and about Britain’s plan to leave the European Union.

The euro was down 0.19 percent to $1.1432 against the dollar.

Improved risk appetite helped lift the dollar to a five-week high against the safe-haven yen.

Oil prices fell after disappointing U.S. factory data sparked fresh concerns about a slowdown in the global economy. But losses were limited as OPEC-led supply cuts and U.S. sanctions against Venezuela brightened the supply outlook.

U.S. crude fell 1.34 percent to $54.52 per barrel and Brent was last at $62.66, down 0.14 percent on the day.

(Additional reporting by Medha Singh in Bengaluru; Editing by Gareth Jones, and Susan Thomas and Dan Grebler)