BLBG:Stocks, Spanish Bonds Gain As Oil Slides; Platinum Jumps
Stocks gained in Europe to a five- month high as Spain’s 10-year bond yield fell to the lowest level in six weeks. Platinum rose after violence escalated at a South African mine, while Brent crude snapped a four-day rally.
The Stoxx Europe 600 Index added 0.3 percent at 7:20 a.m. in New York, headed for an 11th week of gains. Standard & Poor’s 500 Index futures slid less than 0.1 percent after the gauge closed yesterday at a four-month high. Spain’s 10-year bond yield fell seven basis points to 6.45 percent, the lowest since July 5. Platinum rose 0.9 percent. Brent crude fell 1.2 percent.
An index of leading economic indicators in the U.S. probably rebounded in July, economists said before a Conference Board report today, following data this week that showed retail sales jumped more than expected and applications for building permits rose to the highest since August 2008. German Chancellor Angela Merkel said yesterday in Ottawa the European Central Bank’s insistence on conditionality in return for helping cut borrowing costs for indebted governments matches her priorities.
“The U.S. economic deterioration is being curtailed,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “Euro-region officials are going along with the ECB, reducing uncertainty. There’s less anxiety out there so we should see investors continuing to buy.”
Longest Run
The Stoxx 600 has climbed 0.8 percent this week, headed for its longest winning streak since January 2006. Bankinter SA and Bankia SA rallied more than 4 percent on speculation the European Union will disburse the first instalment of a 100 billion-euro ($124 billion) bailout facility to Spain’s lenders. Swiss Life Holding AG (SLHN) jumped 3.5 percent as the biggest Swiss life insurer’s first-half profit exceeded analysts’ estimates.
U.S. index futures were little changed after a two-day advance in the S&P 500. The Conference Board’s gauge of leading economic indicators probably rose 0.2 percent in July after falling 0.3 percent the previous month, based on the median of 46 estimates in a Bloomberg survey of economists. Another report may show Thomson Reuters/University of Michigan preliminary index of consumer sentiment slipped to 72.2 in August from 72.3 the prior month, according to a Bloomberg survey.
Facebook Inc. (FB) rose 0.8 percent in German trading. The world’s largest social-networking company sank 6.3 percent in New York yesterday after it boosted the amount of shares available to trade following its May 17 initial public offering.
Spanish bonds outperformed all their euro-area peers. The 10-year yield has fallen 46 basis points this week, the biggest decline since the five days through July 27. Spain’s two-year yield dropped 23 basis points to 3.75 percent.
Bond-Buying Plan
The two-year yield may fall to as low as 2 percent should the ECB buy debt through its bond-purchase program, said Steven Major, head of fixed-income research at HSBC Holdings Plc in London.
“It’s all about getting those front-end yields stapled to the floor,” Major said in an interview on Bloomberg Television’s “The Pulse” with Maryam Nemazee.
German 10-year yields were little changed at 1.53 percent. The rate on similar-maturity Treasury notes was at 1.83 percent, after reaching 1.86 percent yesterday, the highest since May 11, and matching the 200-day moving average.
Australia’s dollar declined against all of its major peers, weakening 0.6 percent versus the U.S. currency, after the nation’s Treasury said the central bank would be able to ease monetary policy if the currency’s gains are hurting the economy.
Mine Killings
Platinum jumped as much as 1.4 percent to $1,460.99 an ounce, the highest since July 6, after 34 people were killed at Lonmin Plc (LMI)'s Marikana platinum mine in South Africa, according to the country’s police commissioner. The S&P GSCI gauge of 24 commodities slipped 0.4 percent, the first decline in four days. Brent oil fell to $113.87 a barrel, while copper advanced 0.6 percent, the second consecutive gain.
The MSCI Emerging Markets Index (MXEF) fell 0.3 percent, heading for its first weekly drop in five weeks. South Korea’s Kospi Index lost 0.6 percent, with shares in South Africa, Poland Taiwan and Thailand declining. The Hang Seng China Enterprises Index of mainland companies and Turkey’s benchmark gauge both added 0.9 percent. India’s Sensex rose 0.2 percent, while Russia Micex Index slipped 0.1 percent.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jason Clenfield in Tokyo at jclenfield@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
