Stocks (MXWD) rose, driving the MSCI All- Country World Index to a four-week high, and commodities climbed on signs of increased manufacturing output around the world. The dollar weakened and U.S. Treasuries declined.
The MSCI gauge advanced 0.6 percent at 9:50 a.m. in London, on course for the highest close since Dec. 7. The Stoxx Europe 600 Index (SXXP) rallied 0.8 percent, led by gains in the U.K. and Switzerland. U.S. equity-index futures will start trading at 6 a.m. New York time. The Dollar Index fell (DXY) 0.4 percent, while the 10-year Treasury note yield increased five basis points to 1.93 percent. The yield on the similar-maturity French security jumped eight basis points. Oil rose above $100 a barrel and copper gained for a second day.
U.S. manufacturing probably expanded last month at the fastest pace since June, economists in a Bloomberg survey said before a report today, and the Federal Reserve is scheduled to release minutes from its December meeting. Factory output (AIGPMI) in Australia grew for the first time in six months after reports in the past two days showed a pickup in Chinese and Indian manufacturing, providing evidence that some economies are withstanding Europe’s debt crisis.
“While the reasons to be gloomy are legion and unchanged, there is no new negative news, and lots and lots of cash washing around the system,” Kit Juckes, head of foreign-exchange research at Societe Generale SA in London, said in a report today. “All of which makes for too much cash sitting idly by and a decent risk rally.”
Two-Month High
The Stoxx 600 (SPX) climbed to the highest level in two months as the U.K.’s FTSE 100 Index and the Swiss Market Index, which were closed yesterday for a holiday, led gains. The Euro Stoxx 50 Index of the biggest euro-region companies slipped 0.1 percent.
Rio Tinto Group led a rally in mining companies, surging 3.9 percent. Afren Plc jumped 8.5 percent as the U.K. energy explorer focused on Africa said production topped its forecasts.
The MSCI world index (MXWD) sank 9.4 percent last year, the most since 2008, as Europe’s debt crisis hurt global growth. The Standard & Poor’s 500 Index slipped less than 0.1 percent in the period.
The Institute for Supply Management’s factory index (NAPMPMI) rose to 53.4 from 52.7 in November, according to the median projection of 63 economists surveyed by Bloomberg. Fifty is the dividing line between growth and contraction. Construction spending increased for a fourth straight month in November, another report may show.
The dollar weakened 0.4 percent to $1.2980 per euro, which appreciated 0.3 percent against the yen after falling to an 11- year low yesterday. The yen depreciated against 12 of its 16 most-traded peers monitored by Bloomberg, while the New Zealand dollar strengthened versus all its major counterparts.
Debt Sales
The 30-year Treasury bond yield advanced five basis points before the government auctions $56 billion of three- and six- month bills.
The German 10-year bund yield rose one basis point, with yields (.GERKURV) on two-year notes two basis points lower. Italian 10-year bonds advanced, leaving the yield down three basis points at 6.89 percent. Austrian bonds slid, driving the difference in yield (.AUSTGER) with bunds 10 basis points higher, while the French-German spread widened seven basis points.
France auctions as much as 8.9 billion euros of 84-, 161- and 315-day securities, with Belgium selling as much as 2.2 billion euros of bills. The Netherlands also auctions short- dated debt.
Default Risk
The cost of insuring against default on corporate and financial bonds fell, with the Markit iTraxx Crossover Index of 50 companies of mostly high-yield credit ratings dropping 13.5 basis points to 741.5, the lowest since Dec. 7, according to JPMorgan Chase & Co. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers decreased nine basis points to 268.
Oil in New York jumped 1.8 percent to $100.58 a barrel. and copper advanced 0.6 percent to $7,645.25 a metric ton.
The MSCI Emerging Markets Index (MXEF) rose 1.5 percent, set for the highest close since Dec. 9 and the biggest gain in two weeks. The Hang Seng China Enterprises Index (HSCEI) jumped 3 percent as trading resumed in Hong Kong. Benchmark indexes gained at least 2 percent in Russia, India South Africa and South Korea.
To contact the reporters on this story:
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net;
