BLBG:European Stock Futures, Asian Shares Advance; Euro Strengthens
European equity futures, Asian stocks and commodities gained on speculation central banks from Europe to the U.S. and Japan will boost efforts to spur economic growth. The euro gained for a third day against the dollar.
Futures on the Euro Stoxx 50 Index advanced 0.5 percent at 7:20 a.m. in London while contracts on the Standard & Poor’s 500 Index added 0.4 percent. The MSCI Asia Pacific Index (MXAP) climbed 2 percent, the most since Dec. 21. Copper advanced for a fourth day in London while oil increased to a one-week high in New York. The euro added 0.1 percent against the greenback after jumping the most in almost a month yesterday.
Data today is forecast to show the U.S. economy expanded at the slowest pace in a year, while an unexpected decline in Japanese consumer prices and slowing retail sales spurred speculation the Bank of Japan will add stimulus. European Central Bank President Mario Draghi pledged yesterday to preserve the euro, suggesting policy makers may intervene in bond markets. Barclays Plc (BARC), Samsung Electronics Co. and European Aeronautic, Defence & Space Co. reported higher profit.
“Investors are looking for the light in the dark, they are becoming hopeful again,” said Ben Kwong, chief operating officer at KGI Asia Ltd., a Hong Kong-based brokerage. “The European Central Bank has given some hope to the market. The market is expecting further easing.”
U.S. gross domestic product, the value of all goods and services the nation produced, probably expanded at a 1.4 percent annual rate in the second quarter after a 1.9 percent gain in the previous three months, according to the median forecast of economists surveyed by Bloomberg News ahead of today’s data.
Spanish Yields
The ECB is under pressure to lower borrowing costs after three interest-rate cuts since November failed to stop bond yields rising to records in Spain and Italy, threatening the survival of the euro.
Almost nine stocks rose for each one that fell in MSCI’s Asian-Pacific gauge, which has lost 0.4 percent this week. Technology companies led today’s gains.
Samsung Electronics (005930), the world’s largest maker of televisions and mobile phones, climbed 5.2 percent in Seoul after the company forecast higher demand for panels and handsets in emerging markets. Second-quarter profit climbed 48 percent to a record 5.19 trillion won ($4.5 billion), trailing some analysts’ estimates.
Barclays Plc, the British bank searching for a new management team in the wake of the Libor scandal, reported earnings that beat analysts’ estimates on growth in retail and investment banking. EADS said first-half profit rose 89 percent and lifted its full-year earnings forecast as Airbus SAS delivered more planes.
Facebook Profits
Facebook Inc. (FB) shares fell as much as 12 percent in after- hours trading after its first earnings report. Operating margin, excluding certain costs, was 43 percent in the second quarter, a decline from 53 percent a year earlier.
Copper gained 0.8 percent to $7,528 a ton in London, extending a three-day, 0.9 percent advance. Zinc rose 0.9 percent and nickel added 0.8 percent. Oil futures in New York added 0.6 percent to $89.82 a barrel.
Federal Reserve Chairman Ben S. Bernanke said last week that policy makers are “looking for ways to address the weakness in the economy should more action be needed to promote a sustained recovery in the labor market.” The Fed will hold a two-day policy meeting starting July 31, while ECB policy makers next meet on Aug. 2.
The euro gained 0.1 percent to $1.2295. The South Korean won rallied 0.8 percent to 1,138.25 per dollar. Bank of Korea data showed South Korea’s current-account surplus widened to a record $5.8 billion last month as imports declined.
Japan Inflation
Japan’s consumer prices excluding fresh food fell 0.2 percent in June from a year earlier, compared with a Bloomberg News economist survey calling for no change. Bank of Japan Governor Masaaki Shirakawa has said the central bank will pursue “powerful monetary easing” until its 1 percent inflation goal set in February is in sight.
“The data confirmed that Japan is still in deflation,” said Yuji Saito, director of the foreign-exchange department in Tokyo at Credit Agricole SA. “Expectations for further easing by the BOJ are likely to increase.”
Japanese retail sales rose 0.2 percent, a separate government report showed, the smallest gain since November and less than a median forecast for a 1.1 percent increase.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan dropped 6 basis points to 167 basis points, Credit Agricole SA prices show.
Credit-default swap indexes are benchmarks for insuring bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.
To contact the reporters on this story: Richard Frost in Hong Kong at rfrost4@bloomberg.net
To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net
