Oil dips below $50; euro gains, bonds slump on European Central Bank

Bill Gross, portfolio manager of Janus Capital's Global Unconstrained Bond Fund and one of the world's foremost fixed income authorities, has warned that rising U.S. Treasury yields, specifically on benchmark 10-year notes, could signal worrying market upheaval that could derail the current global equity rally.

Yields on USA 10-yer Treasuries rose 4 basis points to 2.55 per cent and the U.S. dollar index was up 0.3 per cent after the ADP employment report beat expectations with a larger increase in private payrolls last month.

Loretta Mester, a US Federal Reserve board member and president of the Federal Reserve Bank of Cleveland, said she supports a rate increase at next week's Federal Open Market Committee meeting.

The euro was up 0.3 percent at a four-day high of $1.0618, having been boosted by comments from European Central Bank head Mario Draghi on Thursday that investors saw as somewhat hawkish.

With the Fed meeting due next week, markets are strongly pricing in a March rate hike as near certain in the wake of recent hawkish comments by USA policymakers.

With the day's biggest United Kingdom data now out, the Pound has dropped against the Euro but risen against the US Dollar.

Construction output has slowed in January though not as much as forecast, while both manufacturing and industrial production has posted negatively on the month in January.

Although the greenback rose back against the pound in the aftermath of the data, its gains were limited due to a recovery in the latter after the United Kingdom budget statement. At Tuesday's close, the pair was valued at 1.2200.

The coming Wednesday will see Dutch voters go to the polls and potentially elect a highly Eurosceptic government to power; ahead of this historic vote will be Tuesday's German and Eurozone confidence figures, which are expected to rise in March. The global benchmark fell 0.17 percent, down from an all-time high set just over a week ago.

That missed forecasts 0.4 percent and was up from last month's preliminary reading of 0.2 percent.

The Dow Jones Industrial Average rose 2.46 points, or 0.01%, to end at 20,858.19.

Among the scarce NZ data out recently has been card spending figures for February, which have shown declining spending in the retail sector and more generally. The S&P 500 gained 3.78 points, or 0.16 percent, to 2,366.76 and the Nasdaq Composite added 9.78 points, or 0.17 percent, to 5,847.33.

Last month's brisk pace of hiring was accompanied by steady wage growth.

The greenback firmed to a 2-1/2-month high of 1.3464 against the loonie, 1-1/2-month high of 0.7539 against the aussie and more than a 2-month high of 0.6919 against the kiwi, from its previous lows of 1.3398, 0.7609 and 0.6979, respectively.

Looking ahead, USA wholesale inventories for January and crude oil inventories data are set to be released shortly.

  • Zachary Reyes