Stocks rally on confidence, housing data as Treasuries, yen fall

Rand, Yen

The rand retreated as much as 1.9% versus the dollar, trading at the lowest level since 2011, after a report showed South Africa’s economic growth slowed to an annualized 0.9% in the first quarter. That was less than the 1.6% median of 15 estimates in a Bloomberg survey.

The yen slid 1.2% to 102.23 per dollar as Hamada said central bank Governor Haruhiko Kuroda “should continue to trust in his judgment and ease further” if needed. Japan’s currency lost 0.9% per euro. The 17-nation shared currency slipped 0.4% to $1.2877 while the dollar strengthened versus 14 of 16 major peers.

The Japanese currency’s decline versus the dollar takes its retreat in May to 4.7%. That would be an eighth month of declines. More yen weakness is “not out of the question,” Hamada said in an interview in Tokyo today.

Italy Auction

Italy’s borrowing costs fell to a record low at the sale of 2.5 billion euros ($3.23 billion) of zero-coupon 2014 notes. The yield on 10-year bonds dropped two basis points to 4.03%.

The cost of insuring corporate bonds declined with the Markit iTraxx Europe Index of credit-default swaps linked to 125 investment-grade companies sliding two basis points to 95 basis points.

U.K. government bonds retreated with Treasuries. The yield on the U.K.’s 10-year securities climbed five basis points to 1.96%, the highest since March 15. The rate on similar- maturity German bunds increased four basis points to 1.50%, also the highest since March.

Treasuries lost 1.3% this month through yesterday, set for their biggest loss in 29 months, a Bank of America Merrill Lynch index shows. German bonds slipped 1.2% and U.K. securities tumbled 1.7%.

The S&P GSCI climbed for the first time in a week, led by a 2.7% rally in corn before a government report that may show wet weather slowed planting in the Midwest. The index is up 1% this month even as gold tumbled 6% and silver dropped about 8%.

Heating oil advanced 1.8% today and West Texas Intermediate oil rallied 0.9% to $95.01 a barrel, the first gain in a week. The Organization of Petroleum Exporting Countries is expected to keep its output target at 30 million barrels a day on May 31 when the group meets in Vienna, a Bloomberg News survey shows.

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