New York — Strong growth data out of Britain prompted the worst daily selloff in gilts for months and pushed yields on the world’s benchmark bonds higher on Thursday, as expectations eased for a Bank of England interest rate cut.
In the US, stock market losses led by Comcast and consumer discretionary stocks were offset by gains in the healthcare sector, while European stocks slid and the US dollar hit highs against the Swedish crown and Japanese yen.
Official data showed that Britain’s economy slowed only slightly in the three months after it voted to exit the European Union. It grew by 0.5% between July and September, a touch less than the second quarter’s 0.7%, but tempering fears about an immediate economic impact following the Brexit decision.
Britain’s 10-year government bond was up 12 basis points to yield 1.27%, on track for its biggest daily rise since June 2015.
German and US equivalents rose to their highest since early June at 0.19% and 1.86%, respectively.
"The stronger (gross domestic data) print in the UK has given further weight to speculation that the BoE will not provide further stimulus any time soon," said Rabobank strategist Richard McGuire.
In US equity markets, investors took Qualcomm’s deal to buy NXP Semiconductors for about $47 billion as a sign of confidence, sending up shares of both.
Despite beating earnings estimates a day earlier, Comcast pulled the S&P and Nasdaq lower, falling as much as 2.7% following price target cuts from Barclays and Deutsche Bank.
The Dow Jones industrial average rose 17.5 points, or 0.1%, to 18,216.83, the S&P 500 lost 0.11 points, or 0.01%, to 2,139.32 and the Nasdaq Composite dropped 12.85 points, or 0.24%, to 5,237.42.
Europe’s STOXX 600 slipped 0.06%, with defensive sectors such as healthcare and utilities providing the biggest boost to the index, underscoring investor caution.
The MSCI all-country world stock index was down 0.3%. The US dollar hit its highest in more than seven and a half years against the Swedish crown after dovish comments from Sweden’s central bank, while the dollar hit a three-month high against the yen on expectations for a December Federal Reserve rate hike.
The dollar was last up 1.22% against the Swedish crown at 9.0164 crowns after touching 9.0424 crowns, its highest level since early March 2009.
Oil prices edged higher on a reported drop in US crude oil inventories, and as commitments from Gulf Opec members assuaged doubts in the market about cooperation from other producers.
US crude rose 65 cents, or 1.32% to $49.83 a barrel, while Brent crude added 74 cents, or 1.48%, to $50.72.
Reuters
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