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GLOBAL MARKETS-Brent crude at 16-month high, Treasury yields rise further

Published 2016-12-01, 12:20 p/m
© Reuters.  GLOBAL MARKETS-Brent crude at 16-month high, Treasury yields rise further
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* Oil prices jump, extend OPEC cut-related advance

* Dollar index slips as euro, pound gain

* Tech shares weigh down Wall Street (Updates prices, changes comments, dateline; previous LONDON)

By Rodrigo Campos

NEW YORK, Dec 1 (Reuters) - Brent crude futures surged to a 16-month high on Thursday on the heels of OPEC's agreement a day earlier to cut output, while Treasury yields continued to climb following the weakest monthly performance for global bonds in almost 13 years.

The benchmark 10-year U.S. Treasury yield jumped to its highest since July 2015 to start the month, after Bank of America (NYSE:BAC) Merrill Lynch's Global Broad Market Index fell 1.76 percent in November. That was its steepest monthly percentage drop since a 2.06 percent fall in July 2003. .MERGBMI

Bets on faster inflation in the United States, on the back of higher oil prices and the expected policies of the incoming Trump administration, have sent Treasury yields soaring.

"You're seeing the market pricing in higher inflation in the near term," said Gennadiy Goldberg, interest rate strategist at TD Securities in New York.

The 10-year U.S. Treasury yield US10YT=RR hit a session high at 2.468 percent. Benchmark 10-year notes US10YT=RR last fell 26/32 in price to yield 2.4608 percent.

Yields were also pressured higher after data showed U.S. factory activity accelerated to a five-month high in November amid a pickup in new orders and production. That offered more evidence that the economy gained further momentum early in the fourth quarter.

The dollar index .DXY , which closed its second consecutive month of gains above 3 percent, slipped 0.32 percent. The British pound GBP= strengthened against the greenback for the seventh time in nine sessions.

The euro rose 0.43 percent to $1.0631.

On Wall Street, declines in technology shares weighed on the Nasdaq Composite index but the benchmark S&P 500 was little changed and not far from a record intraday high set Wednesday.

"What you are seeing is people moving out of names that have been winners in the past couple of years and from companies that have predictable growth such as Facebook (NASDAQ:FB), Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL)," said Michael Scanlon, managing director of Manulife Asset Management.

The Dow Jones industrial average .DJI rose 69.31 points, or 0.36 percent, to 19,192.89, the S&P 500 .SPX lost 2.47 points, or 0.11 percent, to 2,196.34 and the Nasdaq Composite .IXIC dropped 52.83 points, or 0.99 percent, to 5,270.85.

The pan-European FTSEurofirst 300 index .FTEU3 fell 0.69 percent, while MSCI's gauge of stocks across the globe .MIWD00000PUS fell 0.04 percent.

Emerging market stocks fell 0.3 percent.

The Organization of the Petroleum Exporting Countries on Wednesday agreed to its first output cut since 2008, finally taking action after global oil prices fell by more than half over the last two years.

Non-OPEC member Russia will also join output reductions for the first time in 15 years. crude CLc1 last rose 4.5 percent to $51.66 a barrel and Brent LCOc1 traded at $54.39, up 4.9 percent on the day.

Spot gold XAU= sank to its lowest in nearly 10 months.

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