Sovereign bonds and gold fell after Federal Reserve officials signaled that they may raise interest rates sooner than some economists had forecast. European stocks climbed, while the Norwegian krone strengthened following better-than-forecast economic growth.
The yield on 10-year debt from the U.K., Germany and the U.S. climbed at 10:02 a.m. in London. Gold dropped to the lowest price in more than two months and platinum posted its longest run of losses since at least 1987. The Stoxx Europe 600 Index advanced 0.4 percent and Standard & Poor’s 500 Index futures added 0.2 percent, while the krone strengthened 0.7 percent. The Hang Seng Index dropped 0.7 percent after a measure of Chinese manufacturing missed estimates.
Federal Reserve Chair Janet Yellen addresses global central bankers tomorrow. Minutes of the last policy-setting meeting — released late yesterday — showed officials raised the possibility of increasing interest rates sooner than anticipated. In China, the preliminary August reading of a purchasing managers index from HSBC Holdings Plc and Markit Economics fell more than expected to 50.3. A measure of euro-zone manufacturing also missed economists’ estimates.
“Minutes from the Fed last night caught many by surprise and that’s pushing bond yields higher,” said Vincent Chaigneau, global head of rates and foreign-exchange strategy at Societe Generale SA in Paris. “Policy makers are more hawkish than the market expected given the global growth outlook overall is rather weak. Investors will now shift their focus to what Yellen will say.”
The rate on 10-year U.K. gilts climbed three basis points, or 0.03 percentage points, to 2.45 percent, while that on benchmark bunds added one basis point to 1.00 percent. Yields on 10-year Treasuries rose for a fourth day, climbing one basis point, to 2.44 percent. They added three basis points yesterday.
The Norwegian krone gained against all 31 of its major counterparts after a report showed the nation’s economy grew 1.2 percent in the three months through June, double the 0.6 percent rate forecast by economists. The currency appreciated 0.6 percent to 8.1646 per euro. It climbed 0.7 percent to 6.1525 per dollar.
Gold for immediate delivery lost as much as 1 percent to $1,278.45 an ounce, the lowest since June 19, before trading at $1,280.09, according to Bloomberg generic pricing. Silver retreated 0.6 percent to $19.3625 an ounce, and touched $19.3194, the lowest since June 12. Platinum fell 0.4 percent to $1,422.29 an ounce, retreating for a 10th trading day.
Copper for three-month delivery dropped 0.3 percent to $6,991.50 a metric ton in London, while nickel retreated 0.5 percent to $18,860 a ton and lead declined 0.6 percent to $2,244.75 a ton.
A gauge of European corporate credit risk fell to the lowest in more than six weeks.
The cost of insuring against losses on corporate debt declined for a fourth day, with the Markit iTraxx Europe index of credit-default swaps on 125 investment-grade companies decreasing one basis point to 59 basis points, the lowest since July 7.