BLBG:Stocks, Euro Gain On German Growth; Commodities Advance
Stocks rose in Europe for the first time in three days and the euro strengthened after Germany’s economy slowed less than forecast and France unexpectedly averted a contraction. Commodities rallied and the yen weakened.
The Stoxx Europe 600 Index gained 0.4 percent at 7:35 a.m. in New York. Standard & Poor’s 500 Index futures added 0.2 percent. The euro appreciated 0.1 percent to $1.2349 and the cost of insuring European company debt fell to a four-month low. The yen depreciated against its 16 major peers as the Bank of Japan signaled it may take steps to revive growth. Italy’s two- year notes rebounded after Greece raised more than planned at an auction. Platinum jumped 1.3 percent.
Germany’s gross domestic product expanded 0.3 percent in the second quarter from the first, compared with the 0.2 percent predicted in a Bloomberg survey, government data showed. French GDP was unchanged in the quarter, better than the 0.1 percent decline forecast by economists. U.S. retail sales probably increased in July for the first time in four months, analysts said before a Commerce Department report today.
“While not great in any way German and French GDP numbers were better than expected, which adds to the scenario that there is no risk of an imminent euro break up,” said Alexander Kraemer, a cross asset strategist at Commerzbank AG in Frankfurt. “It shows global growth is not collapsing, which also helps reduce investment risks.”
Two shares advanced for every one that retreated on the Stoxx 600. (SXXP) Aker Solutions ASA climbed 3.7 percent after the Norwegian oil-services company posted second-quarter profit and sales that beat analysts’ estimates.
Sales Drop
CRH Plc (CRH) plunged 6.6 percent, its biggest drop this month, as the building-materials company said like-for-like sales in Europe will drop in the second half of the year.
S&P 500 futures gained, indicating that the equity benchmark will advance for the seventh time in eight days. The Chicago Board Options Exchange Volatility Index, known as the VIX, declined 7.1 percent yesterday to its lowest level since June 2007.
U.S. retail sales probably increased 0.3 percent following a 0.5 percent drop in June, according to the median forecast of 85 economists surveyed by Bloomberg News. Another report may show prices paid by producers rose last month.
The euro stayed higher after a report showed the euro-area economy contracted 0.2 percent in the second quarter, in line with the median forecast of 35 economists in a Bloomberg survey.
BOJ Stimulus
The yen fell 0.5 percent against the euro and 0.3 percent versus the dollar. Some Bank of Japan (8301) board members said policy makers shouldn’t dismiss any options in combating risks to the economy from the European sovereign debt crisis, a record of last month’s meeting showed.
The yield on benchmark 10-year German bunds climbed two basis points to 1.42 percent and the rate on similar-maturity French debt fell one basis point to 2.08 percent. The yield on 10-year Treasury notes was steady at 1.66 percent.
The yield on Italy’s two-year note fell five basis points, after earlier climbing as much as eight basis points. Spain’s two-year rate increased one basis point after rising seven basis points.
Greece sold 4.06 billion euros ($5.02 billion) of three- month bills, exceeding its 3.125 billion-euro target. Yields on Greece’s bonds due in February 2023 increased 15 basis points to 24.49 percent.
The Markit iTraxx Europe index of credit-default swaps linked to 125 companies with investment-grade rankings dropped three basis points to 146 basis points, the lowest since May 7.
Mine Violence
The S&P GSCI gauge of 24 commodities gained 0.3 percent. Platinum jumped after at least nine people including two policeman were killed at a South African mine owned by Lonmin Plc, the world’s third-biggest producer of the metal. Copper advanced 0.3 percent. Germany is the third-biggest consumer of the metal.
The MSCI Emerging Markets Index added 0.6 percent, snapping a two-day decline. Egypt’s EGX 30 Index increased 1.3 percent after the military council signaled it won’t oppose President Mohamed Mursi’s decision to retire the nation’s two top generals.
The Hang Seng China Enterprises Index of mainland companies advanced 1 percent and South Korea’s Kospi Index climbed 1.3 percent. India’s Sensex rose 0.5 percent after inflation eased more than estimated in July. Russia’s Micex Index gained 0.2 percent.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
