You are here: Home » Reuters » News
Business Standard

Brent hits 16-month high, Treasury yields rise further

Reuters  |  NEW YORK 

By Rodrigo Campos

NEW YORK (Reuters) - Brent crude futures rose to a 16-month high on Thursday on the heels of OPEC's agreement a day earlier to cut output, while Treasury yields continued to climb following the weakest monthly performance for global bonds in almost 13 years.

The benchmark 10-year U.S. Treasury yield jumped to its highest since July 2015 to start the month, after Bank of America Merrill Lynch's Global Broad Market Index fell 1.76 percent in November -its steepest monthly percentage drop since a 2.06 percent fall in July 2003. <.MERGBMI>

Bets on faster inflation in the United States, on the back of higher oil prices and the expected policies of the incoming Trump administration, have sent Treasury yields soaring.

"You're seeing the market pricing in higher inflation in the near term," said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.

The 10-year U.S. Treasury yield hit a session high at 2.492 percent. Benchmark 10-year notes last fell 21/32 in price to yield 2.4426 percent.

Yields were pressured higher after data showed U.S. factory activity accelerated to a five-month high in November amid a pickup in new orders and production, offering more evidence that the economy gained further momentum early in the fourth quarter.

The dollar index <.DXY>, which closed its second consecutive month of gains above 3 percent, slipped 0.45 percent. The British pound strengthened against the greenback for the seventh time in nine sessions.

The euro rose 0.58 percent to $1.0646.

On Wall Street, declines in technology shares weighed on the Nasdaq Composite and the S&P 500. With the backdrop of higher interest rates, investors are likely to trim exposure to companies with high price-to-earnings ratios, which include some of the largest tech names, according to Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

"In a higher rate environment you are going to want to pay less for growth further out, to a large extent that is probably what is happening in the higher P/E stocks," she said.

The Dow Jones industrial average <.DJI> rose 63.21 points, or 0.33 percent, to 19,186.79, the S&P 500 <.SPX> lost 8.63 points, or 0.39 percent, to 2,190.18 and the Nasdaq Composite <.IXIC> dropped 74.52 points, or 1.4 percent, to 5,249.16.

The pan-European FTSEurofirst 300 index <.FTEU3> ended down 0.59 percent, while MSCI's gauge of stocks across the globe <.MIWD00000PUS> fell 0.21 percent.

Emerging market stocks fell 0.5 percent.

The Organization of the Petroleum Exporting Countries agreed on Wednesday to its first oil output reduction since 2008 after the group's leading producer Saudi Arabia accepted "a big hit" and dropped a demand that arch-rival Iran also slash output.

The deal also included OPEC's first coordinated action in 15 years with non-member Russia. Azerbaijan said it was also willing to discuss cuts.

U.S. crude last rose 3.0 percent to $50.91 a barrel and Brent traded at $53.74, up 3.7 percent on the day.

Spot gold sank to its lowest in nearly 10 months but later pared losses and was last down 0.07 pct at $1,171.87 an ounce.

(Reporting by Rodrigo Campos, additional reporting by Richard Leong, Chuck Mikolajczak and Sam Forgione; Editing by Bernadette Baum and Andrew Hay)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

RECOMMENDED FOR YOU

Brent hits 16-month high, Treasury yields rise further

NEW YORK (Reuters) - Brent crude futures rose to a 16-month high on Thursday on the heels of OPEC's agreement a day earlier to cut output, while Treasury yields continued to climb following the weakest monthly performance for global bonds in almost 13 years.

By Rodrigo Campos

NEW YORK (Reuters) - Brent crude futures rose to a 16-month high on Thursday on the heels of OPEC's agreement a day earlier to cut output, while Treasury yields continued to climb following the weakest monthly performance for global bonds in almost 13 years.

The benchmark 10-year U.S. Treasury yield jumped to its highest since July 2015 to start the month, after Bank of America Merrill Lynch's Global Broad Market Index fell 1.76 percent in November -its steepest monthly percentage drop since a 2.06 percent fall in July 2003. <.MERGBMI>

Bets on faster inflation in the United States, on the back of higher oil prices and the expected policies of the incoming Trump administration, have sent Treasury yields soaring.

"You're seeing the market pricing in higher inflation in the near term," said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.

The 10-year U.S. Treasury yield hit a session high at 2.492 percent. Benchmark 10-year notes last fell 21/32 in price to yield 2.4426 percent.

Yields were pressured higher after data showed U.S. factory activity accelerated to a five-month high in November amid a pickup in new orders and production, offering more evidence that the economy gained further momentum early in the fourth quarter.

The dollar index <.DXY>, which closed its second consecutive month of gains above 3 percent, slipped 0.45 percent. The British pound strengthened against the greenback for the seventh time in nine sessions.

The euro rose 0.58 percent to $1.0646.

On Wall Street, declines in technology shares weighed on the Nasdaq Composite and the S&P 500. With the backdrop of higher interest rates, investors are likely to trim exposure to companies with high price-to-earnings ratios, which include some of the largest tech names, according to Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

"In a higher rate environment you are going to want to pay less for growth further out, to a large extent that is probably what is happening in the higher P/E stocks," she said.

The Dow Jones industrial average <.DJI> rose 63.21 points, or 0.33 percent, to 19,186.79, the S&P 500 <.SPX> lost 8.63 points, or 0.39 percent, to 2,190.18 and the Nasdaq Composite <.IXIC> dropped 74.52 points, or 1.4 percent, to 5,249.16.

The pan-European FTSEurofirst 300 index <.FTEU3> ended down 0.59 percent, while MSCI's gauge of stocks across the globe <.MIWD00000PUS> fell 0.21 percent.

Emerging market stocks fell 0.5 percent.

The Organization of the Petroleum Exporting Countries agreed on Wednesday to its first oil output reduction since 2008 after the group's leading producer Saudi Arabia accepted "a big hit" and dropped a demand that arch-rival Iran also slash output.

The deal also included OPEC's first coordinated action in 15 years with non-member Russia. Azerbaijan said it was also willing to discuss cuts.

U.S. crude last rose 3.0 percent to $50.91 a barrel and Brent traded at $53.74, up 3.7 percent on the day.

Spot gold sank to its lowest in nearly 10 months but later pared losses and was last down 0.07 pct at $1,171.87 an ounce.

(Reporting by Rodrigo Campos, additional reporting by Richard Leong, Chuck Mikolajczak and Sam Forgione; Editing by Bernadette Baum and Andrew Hay)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

Brent hits 16-month high, Treasury yields rise further

By Rodrigo Campos

NEW YORK (Reuters) - Brent crude futures rose to a 16-month high on Thursday on the heels of OPEC's agreement a day earlier to cut output, while Treasury yields continued to climb following the weakest monthly performance for global bonds in almost 13 years.

The benchmark 10-year U.S. Treasury yield jumped to its highest since July 2015 to start the month, after Bank of America Merrill Lynch's Global Broad Market Index fell 1.76 percent in November -its steepest monthly percentage drop since a 2.06 percent fall in July 2003. <.MERGBMI>

Bets on faster inflation in the United States, on the back of higher oil prices and the expected policies of the incoming Trump administration, have sent Treasury yields soaring.

"You're seeing the market pricing in higher inflation in the near term," said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.

The 10-year U.S. Treasury yield hit a session high at 2.492 percent. Benchmark 10-year notes last fell 21/32 in price to yield 2.4426 percent.

Yields were pressured higher after data showed U.S. factory activity accelerated to a five-month high in November amid a pickup in new orders and production, offering more evidence that the economy gained further momentum early in the fourth quarter.

The dollar index <.DXY>, which closed its second consecutive month of gains above 3 percent, slipped 0.45 percent. The British pound strengthened against the greenback for the seventh time in nine sessions.

The euro rose 0.58 percent to $1.0646.

On Wall Street, declines in technology shares weighed on the Nasdaq Composite and the S&P 500. With the backdrop of higher interest rates, investors are likely to trim exposure to companies with high price-to-earnings ratios, which include some of the largest tech names, according to Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

"In a higher rate environment you are going to want to pay less for growth further out, to a large extent that is probably what is happening in the higher P/E stocks," she said.

The Dow Jones industrial average <.DJI> rose 63.21 points, or 0.33 percent, to 19,186.79, the S&P 500 <.SPX> lost 8.63 points, or 0.39 percent, to 2,190.18 and the Nasdaq Composite <.IXIC> dropped 74.52 points, or 1.4 percent, to 5,249.16.

The pan-European FTSEurofirst 300 index <.FTEU3> ended down 0.59 percent, while MSCI's gauge of stocks across the globe <.MIWD00000PUS> fell 0.21 percent.

Emerging market stocks fell 0.5 percent.

The Organization of the Petroleum Exporting Countries agreed on Wednesday to its first oil output reduction since 2008 after the group's leading producer Saudi Arabia accepted "a big hit" and dropped a demand that arch-rival Iran also slash output.

The deal also included OPEC's first coordinated action in 15 years with non-member Russia. Azerbaijan said it was also willing to discuss cuts.

U.S. crude last rose 3.0 percent to $50.91 a barrel and Brent traded at $53.74, up 3.7 percent on the day.

Spot gold sank to its lowest in nearly 10 months but later pared losses and was last down 0.07 pct at $1,171.87 an ounce.

(Reporting by Rodrigo Campos, additional reporting by Richard Leong, Chuck Mikolajczak and Sam Forgione; Editing by Bernadette Baum and Andrew Hay)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard