The dollar strengthened before a report that will probably show the U.S. housing market is stabilizing. U.S. stock-index futures and European equities were little changed, while emerging-market shares fell for a second day as foreign investment in China dropped to a two-year low.
The dollar appreciated against all but three of its 16 major peers, gaining 0.2 percent versus the yen at 6 a.m. in New York. The pound rallied after U.K. retail sales unexpectedly rose. The Stoxx Europe 600 Index (SXXP) slipped less than 0.1 percent and Standard & Poor’s 500 Index futures were little changed. Soybeans fell 0.4 percent on forecasts for rain and cooler weather in the U.S. Midwest.
New home construction in the U.S. probably held near a four-year high, economists said before the Commerce Department report today. Federal Reserve Bank of Dallas President Richard Fisher said yesterday the economy probably won’t lapse into a recession in 2013 and that new stimulus won’t spur growth. China reported foreign direct investment fell for the eighth time in nine months, while a person familiar with the matter said Spain is about to get an emergency disbursement from a 100 billion- euro ($123 billion) bailout package.
“We’re bullish on the dollar,” Lee Hardman, a foreign- exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd., said in an interview. “We are anticipating the crisis in Europe will further escalate and not convinced by the so-called plans to ease the debt crisis. I don’t think the Fed is in a rush to implement” more stimulus, he said.
The yen weakened against all 16 major counterparts, and euro declined 0.2 percent to $1.2270.
The pound strengthened 0.1 percent against the dollar after weakening as much as 0.3 percent. Retail sales including auto fuel gained 0.3 percent in July, compared with a 0.1 percent decline predicted by the media estimate of 22 economists in a Bloomberg survey.
The yield on Spain’s 10-year bonds fell for a fourth day, losing three basis points to 6.61 percent. The rate on benchmark German bunds dropped two basis points to 1.55 percent, while the yield on similar-maturity Italian bonds rose eight basis points.
European telecommunications companies posted the biggest drop of the 19 industries in the Stoxx 600 as Telekom Austria NV tumbled 5.1 percent. The phone company that is partly owned by Carlos Slim’s America Movil SAB cut its profit and sales forecast for 2012. Novozymes A/S (NZYMB) jumped 2.5 percent after reporting second-quarter net income that exceeded analysts’ estimates.
U.S. index futures were little changed after the S&P 500 advanced for the first time in three days yesterday. Builders broke ground on 756,000 houses at an annual rate, according to the median estimate of 79 economists surveyed by Bloomberg News. June’s 760,000 pace was the highest since October 2008.
Other reports may show manufacturing in the Philadelphia area shrank in August and claims for unemployment benefits were little changed last week.
Cisco Systems Inc. (CSCO:US) surged 5.5 percent in pre-market trading as the biggest maker of computer-networking equipment reported quarterly profit and sales that beat analysts’ projections (CSCO:US).
Showers and cooler weather will ease stress to soybeans and may improve conditions and yield potential, Telvent DTN Inc. said in a report yesterday. Arabica coffee was down the most, at 1 percent, and zinc declined 0.7 percent. Copper rose 0.3 percent in London.
The MSCI Emerging Markets Index (MXEF) fell 0.2 percent. The Shanghai Composite Index slid 0.3 percent after the smallest inflow of foreign direct investment since July 2010. India’s Sensex lost 0.1 percent, while Russia’s Micex Index added 0.2 percent.
To contact the reporter on this story: Stephen Kirkland in London at email@example.com; Jason Clenfield in Tokyo at firstname.lastname@example.org
To contact the editor responsible for this story: Justin Carrigan at email@example.com