U.S. debt, gold, gain favor as investors seek safety | Reuters
By Hilary Russ | NEW YORK NEW YORK U.S. Treasury yields fell to their lowest levels in weeks on Wednesday in a flight to safety that also helped lift gold to a three-month peak amid political risks in Europe and worries over U.S
By Hilary Russ
| NEW YORK
NEW YORK U.S. Treasury yields fell to their lowest levels in weeks on Wednesday in a flight to safety that also helped lift gold to a three-month peak amid political risks in Europe and worries over U.S. President Donald Trump's policies.Political concerns, including a strong showing by far-right candidate Marine Le Pen in France's presidential race, sent a wave of overseas buyers to Treasuries, which offer a sizeable yield premium over government bonds from countries in Europe."Across the developed world the U.S. is still pretty much the high-yielding choice and I would argue the U.S. economy is by far the strongest of those choices," said Dominic Pappalardo, director of the taxable portfolio management team at McDonnell Investment Management in Oakbrook, Illinois."If you’re in much of Europe or Asia where you have rates near zero as well as a tremendous amount of economic uncertainty, getting 2-1/2 percent on your money is really, really attractive."Yields on 7-, 10- and 30-year Treasuries US7YT=RR US10YT=RR US30YT=RR fell to their lowest levels since mid-January, while 5-year note yields US5YT=RR hit their lowest since Dec. 8.Spot gold XAU= hit a three-month high of $1,244.67 an ounce before paring gains slightly.
"There's underlying demand for gold as a hedge against political uncertainties on both sides of the Atlantic," said Ole Hanson, head of commodity strategy at Saxo Bank. Even so, any corresponding U.S. risk-off sentiment was little evident on Wall Street, where stocks ended mostly flat. Investors were digesting mixed earnings reports and the Dow Jones Industrial Average slipped as bank stocks weighed.The Dow .DJI fell 35.95 points, or 0.18 percent, to 20,054.34, the S&P 500 .SPX gained 1.59 points, or 0.07 percent, to 2,294.67 and the Nasdaq Composite .IXIC added 8.24 points, or 0.15 percent, to 5,682.45.
Falling Treasury yields pushed down the dollar, which fell after two days of gains. Investors were also pricing out a March rate hike by the Federal Reserve amid uncertainty about Trump's protectionism and immigration policies.The greenback declined 0.03 percent against a basket of major currencies .DXY and the dollar index =USD fell 0.23 percent in late trading.Oil prices gained slightly as investors covered short positions after a rise in U.S. crude inventories was not as massive as many had feared, while gasoline futures jumped nearly 4 percent after a surprise decline in fuel inventories.
U.S. crude CLc1 settled at $52.34 a barrel, up 17 cents, or 0.33 percent. Brent LCOc1 settled up 0.13 percent, or 7 cents, at $55.12.In Europe, shares closed slightly higher, with the STOXX 600 pan-European index STOXX rising 0.33 percent. The MSCI all-country world stock index .MIWD00000PUS rose 0.27 percent. (Additional reporting by Devika Krishna Kumar, Chuck Mikolajczak, Dion Rabouin, Gertrude Chavez-Dreyfuss and Marcy Nicholson in New York; Editing by James Dalgleish and Dan Grebler)
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By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.