Bridgewater surges on euro short

Bridgewater typically bets on dozens of markets at once, making its portfolio relatively unconcentrated. Besides the bearish euro bet, winning positions for Pure Alpha funds in January included a long bet on the Japanese yen versus a short bet on the euro. The fund also made money on long stock bets in Europe, according to the person briefed on the performance.

In February, the largest winner was a long bet on Japanese equities, plus gains on U.S. and European stocks (also long). Smaller gains were made by betting long on interest rates in the U.S. and U.K., the person said.

In March, the largest gain came from a short of the British pound versus a long on the U.S. dollar. There were also winning short currency bets on the euro, Brazilian real, Australian dollar and Canadian dollar, according to the individual. Other winners were bullish bets on stocks and interest rates from both the U.S. and Japan.

Those portfolio gains came as Dalio recently expressed concern about making big investment bets ahead of a potential interest rate increase by the Federal Reserve.

“We expect a Fed tightening and are cautious about our exposures,” Dalio and Mark Dinner of Bridgewater wrote in a private note to clients and other followers March 11.

Read MoreDalio: Fed risks toppling apple cart, 1937-style

Bridgewater’s performance far outpaces many other hedge funds.

The average macro fund is up just 3.07 percent net of fees as of April 1, according to a report by Bank of America Merrill Lynch. The average return for all hedge fund strategies was 2 percent over the same period.

Read More‘Machine’ Ray Dalio takes on ‘Man’ Bill Ackman

The Euro and the Risk of a Squeeze

The speed of the euro’s decline is starting to put seasoned market-watchers on edge.

Monday, the currency hit another 12-year low, an almost daily occurrence right now, with the rate touching $ 1.0457.

This is marvelous news for the funds that have bet on a slide.

But with the euro now down by almost 13% against the dollar so far this year and counting, it’s all happening very quickly. Many analysts had penciled in $ 1.05-ish for the end of this year. Now they’re scrambling for ‘more bearish than thou’ forecasts under parity.

As a general rule, major currencies just don’t move as sharply as this. Emerging-markets currencies sometimes, but not the big tectonic plates like the euro.

“We are now at one of those tricky points where on the one hand, our view has been fundamentally very euro-bearish. But on the other hand, prices have moved very far very fast, and we have already reached our trading targets,” says Jens Nordvig, head of currency strategy at Nomura.

While expectations that the currency will keep sliding in the medium term remain intact, he says, “from a trading perspective […] the risk of a significant retracement higher to 1.10-1.12 for EUR/USD is also increasing.”

The bank, which was short the euro against the dollar, is closing the trade after making a profit of 5.9% as the euro kept falling and is now using different options that allow to trade at the same time both a possible fall and a temporary bounce back in the currency.

Positioning data confirm this view is shared among investors. With the euro trading at its weakest levels in 12 years, combined bets that the euro is going to fall are now lower than the record shorts hit earlier this year, after the ECB announced its easing program, as shown the gray area in this chart.

And it’s certainly not too hard to imagine that the Fed this week disappoints those looking for a rate rise sooner rather than later. If Janet Yellen stays patient, the dollar would be very vulnerable to a tumble.

Henderson Global Investors is among the investors closing bets on the euro seeing the fall in the currency so far this year as sufficient.

The asset manager closed a euro short trade at the end of last week. “The euro has weakened a huge amount already and the move has become quite parabolic and pretty consensus,” says Kevin Adams, head of fixed income at the firm.

But weekly positioning data from the Commodity Futures Trading Commission Friday show that investors have bet a combined $ 24.2 billion on a further fall in the euro against the dollar as of March 10.

These numbers represent a little sliver of the market, but are still a decent read on speculative bets as a whole. Bets against the euro have been building since mid-2014.

At first flush, this all seems odd in the context of climbing stocks. So far this year, the Stoxx 600 European equity index is up by about 17%. The Dax 30 has become one of the world’s best performing indexes, and on Monday surged above 12000.

Some analysts explain this away with hedging. “When euro-denominated assets rise, more euro selling is required to compensate for the higher share of euro assets in the portfolio, which in turn will drive more euro weakness,” wrote analysts at Danske Bank Monday.

The obvious question is when that might snap. “We are skeptical that the euro will continue to ignore the positive development [in the eurozone economic performance] in the coming month and expect a comeback of the currency by June or July this year,” says David Kohl, currency strategist at Julius Baer.

Hedge funds benefit as euro falls

The euro’s plunge has given a much-needed lift to hedge funds that have been repeatedly frustrated by the world’s central banks.

A bevy of multibillion-dollar funds has gained as much as 9% this year as their managers bet against the euro, riding the European Central Bank’s push to weaken the currency and bolster Europe’s economy.

It has been “manna from heaven,” said one hedge-fund manager, who made money last year shorting the euro, or betting the currency would lose value. He has steadily reduced his position and taken profits this year as the euro has continued to fall.

Bets against the euro helped Bridgewater Associates LP, the world’s biggest hedge-fund firm, earn 7% in its Pure Alpha fund in the first two months of 2015, its strongest start in years, a person familiar with the firm said.

Some of the biggest winners have been the so-called macro funds that bet on broad economic developments, such as shifts in monetary policy, including Caxton Associates LP, Moore Capital Management LP and Tudor Investment Corp. Other funds not known for making big macro calls, such as the D.E. Shaw Group, also have profited from the currency’s decline against the dollar.

It has been a difficult few years for macro managers and trend followers, who rely on complex automatic-trading strategies to profit and who have bemoaned that the markets are unusually calm and difficult to trade.

Many managers also misread broad changes and misplayed trades. One misfire: Investors widely bet that interest rates would rise last year, only to find U.S. bond prices were surprisingly resilient, pushing yields lower.

The euro wager has tested fund managers’ patience. Some of them have been betting against the currency for as long as two years, though traders said more investors piled in or increased their wagers starting last summer, when the ECB said it would push a key interest rate into negative territory.

Bets against the euro have mounted rapidly in recent months. In the aggregate, investors have boosted their bearish euro bets in the futures market by 19% since the start of the year, according to data from the U.S. Commodity Futures Trading Commission that runs through March 10. While futures trading accounts for a small fraction of the foreign-exchange market, it is widely seen as a good proxy for how investors are positioned.

As of March 10, investors held a net 181,073 bearish bets, according to the CFTC. That compares with 152,219 at the end of 2014. Investors as a group were bullish on the euro as recently as May.

The ECB kicked off a vast bond-buying program last week, pushing the euro to a 12-year low against the dollar and boosting profits that began to trickle in at the end of last year. The euro ended Friday at $ 1.0497, down 13% since the end of 2014.

“It’s very, very common for macro managers to be short the euro against the dollar,” said Nicolas Rousselet, head of hedge funds at Swiss-based investment firm Unigestion. “It’s a huge driver of macro fund returns.”

The wager, in some ways, is more a bet on the dollar, with investors drawn to the prospect of higher interest rates in the U.S. as other central banks ease policies. Many funds that are betting against the euro also are shorting other currencies against the dollar, such as the Korean won and the Japanese yen.

But the euro bet is “probably the largest position for most macro managers at the moment,” according to Tim Schuler, investment strategist at Permal Group, which oversees $ 22 billion in assets.

“You have all these divergent monetary policies where you have tightening in a few countries and easing in others, and that’s creating a lot of potential for macro managers where that didn’t exist after the crisis,” said Greg Dowling of Cincinnati-based Fund Evaluation Group, which invests clients’ money in hedge funds and has had exposure to the trade through several managers.

Some investors warn that betting on a strong dollar and weaker euro has become so popular that a surprise, such as the Fed deciding not to raise interest rates soon, could quickly lead to losses.

Euro hits 27-month low versus dollar on ECB easing bets

The euro slid to a 27-month trough against a buoyant dollar on Wednesday, a day ahead of a crucial European Central Bank meeting that could pave the way for more easing measures in the euro zone.

The greenback also hit a seven-year peak against the yen, boosted by comments from US Federal Reserve officials who painted an upbeat picture of the US economy despite falling oil prices, prompting a ramping up of expectations of a mid-2015 interest rate rise.

Those gains helped the dollar hit its strongest point since March 2009 against a basket of major currencies at 88.867 .

New York Fed president William Dudley reiterated on Tuesday that for now the dramatic drop in oil prices – down more than 30 per cent since June – was a net benefit for the United States, helping U.S. consumers and major trade partners.

“The ‘considerable time’ phrase … is certainly under threat and in that environment there’s not going to be much appetite for selling into the dollar,” he added, referring to a phrase used by the Fed to describe when rates will rise.

The euro fell 0.4 per cent to $ 1.2331, its weakest since late August 2012, could rebound on Thursday if the ECB fails to announce any new measures to shore up the struggling euro zone economy and ward off the threat of deflation.

The dollar climbed to 119.44 yen on trading platform EBS, its strongest level since August 2007. The dollar last traded near 119.35 yen, up 0.1 per cent on the day.

The greenback also rose against the Australian dollar, which slid to a 4-year low of $ 0.8388 after data showed Australia’s economy unexpectedly slowed last quarter, prompting markets to price in more chances of an interest rate cut.

Reuters

FOREX-Euro hits 27-month low vs strong dollar on ECB easing bets

* Euro skids to 27-month low ahead of ECB meeting

* Greenback sets fresh 7-year high vs yen

* Dollar index touches 5-1/2 year peak

* Aussie falls to 4-year low after Q3 GDP disappoints

By Jemima Kelly

LONDON, Dec 3 (Reuters) – The euro slid to a 27-month trough against a buoyant dollar on Wednesday, a day ahead of a crucial European Central Bank meeting that could pave the way for more easing measures in the euro zone.

The greenback also hit a seven-year peak against the yen, boosted by comments from U.S. Federal Reserve officials who painted an upbeat picture of the U.S. economy despite falling oil prices, prompting a ramping up of expectations of a mid-2015 interest rate rise.

Those gains helped the dollar hit its strongest point since March 2009 against a basket of major currencies at 88.867 .

New York Fed President William Dudley reiterated on Tuesday that for now the dramatic drop in oil prices – down more than 30 percent since June – was a net benefit for the United States, helping U.S. consumers and major trade partners.

“The balance of Dudley’s comments suggest he’s playing down the global environment and he was much more keen on emphasizing the positive impact on growth from falling,” said Derek Halpenny, European head of global markets research at Bank of Tokyo-Mitsubishi UFJ in London.

“The ‘considerable time’ phrase … is certainly under threat and in that environment there’s not going to be much appetite for selling into the dollar,” he added, referring to a phrase used by the Fed to describe when rates will rise.

Halpenny said the euro, which fell 0.4 percent to $ 1.2331 , its weakest since late August 2012, could rebound on Thursday if the ECB fails to announce any new measures to shore up the struggling euro zone economy and ward off the threat of deflation.

The dollar climbed to 119.44 yen on trading platform EBS, its strongest level since August 2007. The dollar last traded near 119.35 yen, up 0.1 percent on the day.

“In terms of flows, overseas (non-Japanese) players seem to be buying (dollars against the yen) aggressively on dips,” said a trader for a Japanese bank in Singapore.

The greenback also rose against the Australian dollar, which slid to a 4-1/2-year low of $ 0.8388 after data showed Australia’s economy unexpectedly slowed last quarter, prompting markets to price in more chances of an interest rate cut.

(Additional reporting by Masayuki Kitano in Singapore and Ian Chua in Sydney; Editing by Andrew Heavens)

Rate hike bets keep sterling on track for weekly gains vs euro

LONDON, July 18 (Reuters) – Sterling held steady on Friday and remained on track for a big weekly gain against the euro, as investors bet on further divergence in monetary policy between Britain and the euro zone.

Concerns about tensions between Russia and the West after a Malaysian passenger plane was shot down over eastern Ukraine and jitters about Israel’s ground offensive in Gaza, which have hit risk assets since Thursday, had little impact on the pound.

Traders expect the Bank of England to tighten monetary policy this year or early next, while the European Central Bank is set to keep policy loose and perhaps resort to asset purchases to avert the threat of disinflation in the euro zone.

The euro was flat at 79.10 pence, off a 22-month low of 78.89 pence struck on Thursday, but still on track for weekly losses of about 0.6 percent.

Against the dollar, the pound was steady at $ 1.7105 , retreating from an almost six-year high of $ 1.7192 reached on Tuesday.

“Investors are waiting for more bullish cues from the UK,” said a London-based spot trader. “Most of the good news is priced in, and if sterling has to move higher then rate hike expectations have to be brought forward.”

Sterling has surged over the past year as Britain’s economy has shown signs of a strengthening recovery, fuelling expectations that the BoE will hike interest rates before the year’s end. The currency has gained almost 15 percent against the dollar and almost 10 percent against the euro over the year.

Earlier this week, the sterling overnight index swap curve implied a chance of a rate hike in November after inflation jumped more than expected. But those expectations have been pushed back to December after data showed wage inflation was still subdued.

Investors will look for clues to the timing of any move in minutes of the Bank of England’s most recent policy meeting, which are due for release next week. Some analysts believe the July meeting could be the last at which the decision to leave interest rates unchanged at 0.5 percent is unanimous.

“Some monetary policy committee (MPC (KOSDAQ: 050540.KQ – news) ) members have signalled the decision is becoming more finely balanced,” RBC Capital said in a note. “By the time the August Inflation Report projections are presented at the next MPC meeting, news of another quarter of above-trend growth could provide the trigger for at least one vote to tighten policy.” (Reporting by Anirban Nag; Editing by Catherine Evans)

FOREX-Euro subdued by German data, dollar holds on to recent gains

* Dollar index touches near 2-week high

* Euro tests 22-month low versus British pound

* Euro zone data lags, weighs on euro (Updates, adds quote)

By Anirban Nag

LONDON, July 7 (Reuters) – The euro slipped on Monday, testing a 22-month trough against the British pound, after weak German industrial data highlighted the divergent economic prospects between the euro zone and those of its biggest trading partners.

German industrial output fell 1.8 percent on the month in May, its biggest drop in more than two years, surprising most analysts, who had forecast an unchanged reading.

The weak data kept alive expectations that the European Central Bank may need to loosen monetary policy further in coming months in the face of disinflationary pressures and subdued economic growth.

ECB policymaker Benoit Coeure said at the weekend that rates will remain very low for a long time, regardless of developments in the rest of the world.

In contrast, the Bank of England is expected to tighten policy either before the end of this year or early next year. Investors have also brought forward their view on the timing of the first rate hike by the U.S. Federal Reserve to mid-2015 after a stellar jobs report last week.

That helped the dollar index trade near its highest in nearly two weeks, at 80.359. The euro was down slightly at $ 1.3590, having fallen to $ 1.3576 earlier in the European session, its lowest since July 26. It fell to a 22-month low against the pound of 79.14 pence after the German data, but recovered to trade at 79.35 pence.

“The German data was a bit weak and in line with recent euro zone data. This will add to selling pressure in the euro in the near term,” said Yujiro Goto, currency analyst at Nomura.

He expected euro/dollar to drift lower, especially in light of last week’s U.S. jobs data. The strong non-farm payrolls report prompted traders to slightly increase bets that the Fed will lift rates in June next year.

Most traders, though, are cautious about adding to long dollar bets, aware that Fed policymakers will probably err on the side of caution or wait for wage inflation to pick up before hiking interest rates.

FED MINUTES IN FOCUS

Fed minutes, due to be released later this week, should shed more light on how the debate within the rate-setting committee is shaping up, traders said.

“The FOMC minutes this week could reveal how the Fed views the recent rise in inflation and stronger data. The risk is that there is a divergence between the doves and the hawks on the committee,” Morgan Stanley analysts said in a note.

“With (Fed chair Janet) Yellen staying firmly dovish, the minutes may reflect this and has a chance to put the dollar under pressure.”

The dollar’s failure to make much headway has been the big disappointment on currency markets this year. Most traders say that unless two-year Treasury yields rise sharply, the dollar, which has a good correlation to U.S. yields, is unlikely to push much higher.

The dollar fell against the yen to 101.90 yen, after having risen 0.7 percent last week. The euro also shed 0.2 percent to trade at 138.51 yen with falling stock markets offering the safe-haven yen some support.

Sterling, however, slipped against the dollar to $ 1.7125, off last week’s six-year high of $ 1.7180. The Canadian dollar, also in favour at the moment, stood at C$ 1.0643 per USD , just off a six-month high of C$ 1.0620 struck on Thursday.

(Editing by Hugh Lawson)

FOREX-Euro struggles after German data, nears 2-year low vs sterling

* Dollar index touches near 2-week high

* Euro at 22-month low versus British pound

* Euro zone data lags, weighs on euro (Recasts after German data, adds quote)

By Anirban Nag

LONDON, July 7 (Reuters) – The euro fell on Monday, hitting a 22-month trough against the British pound, after weak German industrial data highlighted the divergent economic prospects between the euro zone and those of its biggest trading partners.

German industrial output fell 1.8 percent on the month in May, its biggest drop in more than two years, and surprised most who had forecast an unchanged reading. It kept alive expectations that the European Central Bank would have to loosen monetary policy further in coming months in the face of disinflationary pressures and subdued economic growth.

In contrast, the Bank of England is expected to tighten policy before the end of this year or early next year. Investors have also brought forward the timing of the first rate hike by the U.S. Federal Reserve to the middle of 2015 after a stellar jobs report last week.

That helped the dollar index trade near its highest in nearly two weeks, at 80.359. The euro was down 0.1 percent at $ 1.3576, its lowest since July 26, while it fell to a 22-month low against the pound of 79.14 pence after the German data.

“The German data was a bit weak and in line with recent euro zone data. This will add to selling pressure in the euro in the near term,” said Yujiro Goto, currency analyst at Nomura.

He expected euro/dollar to drift lower, especially in light of last week’s U.S. jobs data. The strong non-farm payrolls report prompted traders to slightly increase bets that the Fed will lift rates in June next year.

Most traders are cautious about adding to long dollar bets, aware that Fed policymakers will probably err on the side of caution or wait for wage inflation to pick up before hiking rates.

Fed minutes, due to be released later this week, should shed more light on how the debate within the rate-setting committee is shaping up, traders said.

DOLLAR FIRM

The dollar’s failure to make much headway has been the big disappointment on currency markets this year. Most traders say that unless two-year Treasury yields rise sharply, the dollar, which has a good correlation to U.S. yields, is unlikely to push much higher.

The dollar held steady versus the yen near 102.14 yen , after having risen 0.7 percent last week.

“It wouldn’t be surprising to see a rise toward 102.50 yen,” said Bart Wakabayashi, head of foreign exchange for State Street Global Markets in Tokyo, referring to the near-term outlook for the dollar against the yen.

“But if you ask whether we will see a new trend, that probably won’t be the case,” he added.

Sterling slipped slightly against the dollar to $ 1.7150, but stayed within easy reach of last week’s six-year high of $ 1.7180 . The Canadian dollar, also in favour at the moment, stood at C$ 1.0655 per USD, just off a six-month high of C$ 1.0620 struck on Thursday.

The Australian dollar, in contrast, was still smarting from Reserve Bank of Australia Governor Glenn Stevens’ remarks about it being overvalued. The Aussie, nursing a 0.7 percent loss last week, eased 0.1 percent to $ 0.9355.

(Additional reporting by Masayuki Kitano; Editing by Susan Fenton)

ECB easing bets keep euro zone bond yields subdued

* Italian, Spanish yields resume falls

* ECB outlook also supporting core euro zone debt

* German 30-year bond sale seen going smoothly

By Emelia Sithole-Matarise

LONDON, May 28 (Reuters) – Euro zone government bond yields dipped further on Wednesday as expectations that the European Central Bank will deliver monetary stimulus next week underpinned demand.

Euro zone bonds across the credit spectrum have firmed this week as fears receded that big wins by anti-euro parties in EU parliamentary elections might derail fiscal reforms in weaker countries and ECB policymakers signalled further policy easing.

As well as a rate cut, the ECB is preparing a package of other easing measures, Reuters reported earlier this month. They include cutting the deposit rate into negative territory – effectively charging banks to hold cash at the ECB overnight – and targeted measures to help boost lending to smaller firms.

“Price action is mainly being driven by the prospect of the ECB (easing) next week,” said BNP Paribas strategist Patrick Jacq. “The ECB may not only cut interest rates but could also take additional decisions on liquidity measures, and that’s supporting the market.”

Italian 10-year bond yields were 3 basis points down at 2.97 percent, extending their fall after Prime Minister Matteo Renzi’s party scored a surprisingly big win in EU parliamentary elections over the anti-establishment 5-Star Movement.

Equivalent Spanish yields were down by a similar amount at 2.87 percent with Irish yields 1 bp lower at 2.69 percent.

The firm tone augured well for an Italian auction on Thursday of 6.0 billion to 7.5 billion euros of five- and 10-year bonds, after a smooth sale on Tuesday of 3 billion euros of zero-coupon debt and 1 billion euros of inflation-linked bonds.

“There might just be a little bit of concession going into the auction tomorrow but it should go OK,” a trader said. “Bigger picture, we still remain constructive on the periphery given the ECB outlook and think there will be further compression in spreads.”

A sale of up to 2 billion euros of German 30-year bonds on Wednesday is also expected to be comfortably absorbed given the small size of the offer and the ECB’s easing signals.

The 30-year Bund yielded 2.24 percent in the secondary market, down 2 bps on the day with 10-year Bund yields , the benchmark for euro zone borrowing, down a similar amount at 1.32 percent. Other top-rated euro zone bond yields were 2-3 bps lower.

(Editing by Catherine Evans)

GLOBAL MARKETS-ECB easing bets push euro to 3-month low

(Recasts with euro falling to 3-month low, updates prices, adds comments) * Euro sinks as weaker than forecast German data boosts ECB rate cut bets * Wall Street expected to see steady start * Little impact of ratings upgrades for Spain and Greece * Investors wary ahead of Ukraine vote, European result * Thai coup only mild distraction for Asia shares By Marc Jones and Jamie McGeever LONDON, May 23 (Reuters) – The euro fell to a three-month low against the dollar and stocks and bonds in the region climbed on Friday, after a wobble in German business confidence added to expectations the European Central Bank will cut interest rates next month.

Asian shares had also finished the week strongly, hitting one-year highs, while benchmark U.S. and European bond yields, which move inverse to prices, were heading for rises after a week lacking in clear direction in terms of data and sentiment.

Mario Draghi and his ECB colleagues have been sending clear signals in recent weeks that a rate cut plus a few other unconventional measures are on the cards for next month.

A weaker-than-expected reading from Germany’s closely-watched Ifo business climate index as it fell to its lowest level of the year was enough to convince many ECB action was now a nailed-on certainty.

The euro was down a third of 1 percent on the day at $ 1.3621 , the lowest in three months and crucially below a technical support level of $ 1.3636 that had held firm for almost nine months.

It’s a level the single currency has flirted with three times this week but has not closed below it. This could be the first day it has done so since September last year.

“The renewed fall in the Ifo in May suggests that the German recovery may be slowing. We expect annual GDP growth of about 2 percent this year and next, which will not be strong enough to drive a rapid recovery across the euro zone or to eradicate the threat of deflation,” said Jennifer McKeown, senior European economist at Capital Economics.

Sovereign credit ratings upgrades on Friday for Spain and Greece had little impact on European markets as their respective economies have been improving for some time Investors were also reluctant to take on too much risk ahead of European election results and a presidential election in Ukraine this weekend, and because British and U.S. markets are closed on Monday, which will dry up market liquidity.

“In places like Italy and Greece we don’t have properly elected governments, they are just cobbled together, so this weekend’s results will play on people’s minds,” said Marc Ostwald, a strategist at Monument Securities.

NEGATIVE FEELINGS Share markets in Europe suffered a soft start but the ECB expectations had helped them recover by midday and U.S. futures pointed to Wall Street starting steady.

The FTSEuroFirst 300 index of leading European shares was little changed at 1,365 points, Germany’s DAX was up 0.2 percent at 9,743 points while Britain’s FTSE 100 was down 0.2 percent at 6,801 points.

Estonia’s ECB member Ardo Hansson on Friday echoed Germany’s Jens Weidmann in backing the idea of charging banks a penalty if they stockpile spare cash at the ECB, a move designed to encourage them to use it instead to lend to firms and consumers.

“Negative interest rates (on ECB deposit facility) are not completely uncharted territory as some of the smaller countries have done this. The fact that it has been tried elsewhere makes you a bit more comfortable,” Hansson said in an interview.

Earlier in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.1 percent at 487.70 after hitting a one-year high of 488.42.

Markets were only mildly distracted by news that Thailand’s military had seized power in a bloodless coup late on Thursday, pitching the nation into a further period of uncertainty as the long drawn out political crisis shows no signs of resolution.

The Nikkei climbed 0.9 percent as the yen remained on the back foot against the dollar. The Japanese index gained about 2.7 percent this week, notching its first weekly gain in three.

ELECTIONS Investors also felt a sense of relief getting through the week without serious market ructions from the crisis in Ukraine as it, like Europe, also gears up for elections over the weekend.

Russian shares were sitting just off a 3-month high after a fourth week of gains. U.S Treasury debt yields slipped 1 basis point on the day to 2.54 percent but were still up almost 5 basis points on the week following the recent slide to multi-month lows below 2.50 percent.

Against the backdrop of this weekend’s European elections where Eurosceptic parties are expected to make gains, Italian 10-year yields were on track for their biggest weekly rise in a year, albeit from recent multi-year lows.

The dollar traded a shade higher at 101.93 yen, and has gained about 0.2 percent on the week. Though the rise is modest, it is still poised to snap a four-week losing run versus the yen.

Benchmark three-month nickel futures at the London Metal Exchange (LME) looked set to pocket a 3.5 percent weekly gain, building on the year’s stellar advance after a shutdown of Indonesian supply, while Brent oil and gold were steady after largely quiet weeks.

(Reporting by Jamie McGeever, additional reporting by John Geddie in London; Editing by Alison Williams; To read Reuters Global Investing Blog click on http://blogs.reuters.com/globalinvesting; for the MacroScope Blog click on http://blogs.reuters.com/macroscope; for Hedge Fund Blog Hub click on http://blogs.reuters.com/hedgehub)