BS: Yen, Treasuries Gain Before ECB Meeting; Bond Risk Rises
The Stoxx Europe 600 Index (SXXP) added 0.5 percent at 8:20 a.m. in New York, after climbing as much as 0.8 percent. Standard & Poor’s 500 Index futures rose 0.3 percent. Brent crude jumped 1.6 percent and the S&P GSCI index of commodities rallied 0.4 percent. The euro fell 0.8 percent to $1.2433. Spain’s 10-year yield climbed above 6.5 percent for the first time in almost one week. The yield on the 10-year Treasury note sank three basis points to 1.60 percent as trading resumed following the Independence Day holiday.
China cut its benchmark deposit rate by 25 basis points and lending rate 31 basis points, and the Bank of England restarted bond purchases. The ECB reduced its benchmark interest rate to a record-low 0.75 percent today. Companies in the U.S. added 176,000 workers in June, according to figures from Roseland, New Jersey- based ADP Employer Services.
“Central banks will have to do more,” said Niels From, chief analyst at Nordea Bank AB in Copenhagen. “There’s concern that the economies are continuing to slow and that unemployment is rising.”
VW, Porsche Deal
The Stoxx 600 is on course for a fifth week of gains, the longest winning streak since January. Volkswagen AG jumped 5.9 percent and Porsche SE rose 0.5 percent after VW reached an agreement with Germany’s tax authorities to buy the 50.1 percent stake in Porsche that it doesn’t already own. GKN Plc surged 13 percent as the U.K. maker of parts for Airbus SAS jetliners agreed to buy the aircraft-engine unit of Volvo AB for 633 million pounds ($987 million).
The S&P 500 closed at a two-month high on July 3. The Institute for Supply Management’s index of non-manufacturing businesses is due for release at 10 a.m. New York time. The gauge fell to 53 last month from 53.7 in May, according to the median forecast of 69 economists surveyed by Bloomberg. Readings greater than 50 signal expansion.
Spain’s 10-year bond yield climbed 15 basis points to 6.56 percent, the highest since June 29. The country sold 10-year securities at an average yield of 6.43 percent today, compared with 6.044 percent at a sale in June. It also sold debt maturing in 2015 and 2016.
The yield on the 10-year gilts rose two basis points to 1.74 percent. The Monetary Policy Committee raised its asset- purchase target by 50 billion pounds ($78 billion) to 375 billion pounds.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net
