Treasuries slide on U.S. jobs growth

Treasuries fell for a fourth day, while oil and the U.S. Dollar Index (NYBOT:DXH14) rose as stronger-than-forecast jobs growth fueled optimism in the American economy. U.S. stocks fluctuated on Ukrainian tensions over the future of Crimea.

Treasury yields increased five basis points to 2.79% as of 12:43 p.m. in New York. The Bloomberg Dollar Spot Index was up 0.2%, while the ruble headed for a fourth weekly decline of more than 1%. The Standard & Poor’s 500 Index climbed less than 0.1%. Copper futures headed for the biggest loss in more than two years, while West Texas Intermediate crude increased 1%.

The Labor Department said employers added 175,000 jobs in February, topping the median forecast of economists for 149,000 and signaling the economy is starting to bounce back from a weather-induced setback. Russia said Ukraine must pay off almost $2 billion it owes it for natural gas by today and signaled it may cut supplies, ratcheting up the pressure on its cash- strapped neighbor. China’s onshore bond market had its first default.

“The more we can add jobs and get the economy to organically grow through traditional measures is a wonderful thing and equity markets are reacting to this as we expected,” Darrell Cronk, the New York-based regional chief investment officer at Wells Fargo Private Bank, which manages $170 billion, said by phone. “We want this economy to stand on its own two feet. We want this to be a self-sustaining growth engine.”

Equity Markets

Global stocks are poised for a fifth week of gains as concern eased that Russia’s incursion into Ukraine would spark a broader conflict. Ukraine, a key transit nation for east-west energy supplies, is struggling to keep hold of Crimea after pro- Russian forces seized control of the peninsula. The West has urged Russia to pull back, and began yesterday to impose sanctions.

The S&P 500 (CME:ES) rallied 1% in the previous four days and is headed for a second weekly gain. More than $4 trillion has been added to equity values around the world since the Feb. 4 low to a record $63 trillion.

Data yesterday showed claims for unemployment benefits fell to a three-month low last week, stoking speculation U.S. companies are confident economic growth will rebound after harsh winter weather depressed demand.

Among U.S. shares moving today, Safeway Inc. slid 2.8% as investors weighed potential antitrust hurdles to an offer for the company. GT Advanced Technologies Inc. climbed 3.5% after Credit Suisse Group AG advised investors to buy the shares.

REIT ETFs

Investment flowing into exchange-traded funds focused on real estate this year has already eclipsed the 2013 total as concern over rising interest rates subsides and property markets improve. In 2014, 31 percent of money going into U.S. sector- focused ETFs, or $3 billion through March 6, was for real estate, according to data compiled by Bloomberg.

The Stoxx Europe 600 Index slipped 1.3%. Getinge AB, the maker of sterilization systems, sank 21% after giving a first-quarter profit forecast lower than analysts had estimated.

The U.S. sent six F-15 fighter jets to Lithuania and will dispatch 12 additional F-16s to Poland, the two countries’ defense ministries said yesterday. The U.S. Navy sent the guided-missile destroyer USS Truxtun into the Black Sea in what it called a routine visit unrelated to events in Ukraine.

Rolling Thunder

“There’s definitely concern about the Russia-Ukraine thunderstorm rolling back into the market,” Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co., which oversees about $150 billion, said in a telephone interview. “That in itself is causing some uncertainty among investors. The economy is continuing to gradually improve. We’ve had very good market performance over the last several weeks in spite of great uncertainty on the geopolitical front.”

The dollar rose to a six-week high against the yen, increasing 0.3% to 103.35 yen. The Chinese yuan posted its biggest weekly gain since October on speculation the central bank has ceased engineering a decline in the currency to discourage one-way appreciation bets.

Russia’s Micex Index has declined 7.3% this year. The ruble weakened 0.7% to 42.7093 against Bank Rossii’s target basket of dollars and euros, heading for a 1.6% decline for the week.

Visa Restrictions

Russian stocks are headed for their worst week since President Vladimir Putin cracked down on protesters following his election in May 2012. Putin’s incursion into Ukraine’s Crimea region, like the imprisonment of demonstrators following his return to the presidency two years ago, is sparking investor concern that Russia’s economic growth will falter as the U.S. and Europe threaten the country with sanctions.

President Barack Obama’s administration restricted visas for Ukrainian and Russian officials whom it said threaten the former Soviet republic’s sovereignty. Lawmakers in Ukraine’s Crimea region called a referendum to return the Black Sea peninsula to Russian control.

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose 0.4%, trimming this week’s decline to 1.8 percent. The Shanghai Composite Index lost 0.1 percent as investors weighed reform prospects at a legislative meeting.

Debt Default

Shanghai Chaori Solar Energy Science & Technology Co. won’t make an interest payment in full by the deadline, the company’s vice president Liu Tielong said. The company blamed the failure of an agreement to sell a power station to Greece for its failure to meet interest payments, state-owned Xinhua News Agency reported, citing an unidentified person at Chaori.

The first onshore default comes as China’s benchmark rate for loans between lenders was set for the biggest weekly drop this year after the central bank scaled back cash withdrawals in its money-market operations.

Copper futures for delivery in May slid 4.1% to $3.0865 a pound in New York.

India’s S&P BSE Sensex Index climbed 3.8% this week, the most since April. The country’s current-account deficit dropped to a four-year low in the fourth quarter, the Reserve Bank of India said March 5.

Indonesia’s rupiah rose to the highest since November and is 1.5% stronger this week, making it the best performing Asian currency versus the dollar in the last five days. India’s rupee is on track for a 1.1% weekly gain.

 

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