BLBG:Commodities Rise With European Stocks; China’s Yuan, Shares Gain
Commodities rose, set for the best quarter in more than a year, as the euro and European stocks advanced. China’s stocks rallied a second day and the nation’s currency strengthened to the highest level since 1993 amid speculation the government will add to stimulus measures.
The Standard & Poor’s GSCI Index of 24 commodities rose 0.6 percent as of 8:04 a.m. in London as oil advanced 0.7 percent and copper gained 1.1 percent. The euro strengthened 0.1 percent to $1.2929 and the Chinese yuan reached 6.2861 per dollar. The Shanghai Composite Index jumped 1.5 percent, poised to snap four months of losses. The Stoxx Europe 600 Index increased 0.3 percent and futures on the S&P 500 Index were little changed.
Japan’s consumer prices in August matched the steepest decline in 16 months, sending the country’s benchmark gauge to a two-week low today. The nation’s industrial production fell more than expected, while output in South Korea dropped for a third month, government data showed. The China Securities Regulatory Commission issued information-security rules after domestic shares rallied the most in three weeks yesterday on bets the government would announce measures to boost markets.
“Everybody is hoping for a triple R cut or interest-rate cut,” Hao Hong, managing director for research at Bocom International Holdings Co., said in a Bloomberg Television interview, referring to Chinese banks’ reserve-requirement ratio. “The inflation pressure on the Chinese economy is probably overestimated, and they should have enough room to do more easing instead of less.”
Spain, France
The euro rose for a second day against the dollar as Spain’s pledge to meet its deficit target stoked speculation it will qualify for an international rescue, easing concern about the region’s debt crisis. Price swings in major currencies ebbed before the start of holidays in China next week. The JPMorgan G7 Volatility Index fell to 7.74, the lowest since October 2007.
Spanish Prime Minister Mariano Rajoy’s Cabinet yesterday approved a new tax on lottery winnings and a cut in ministries’ spending to shrink the euro area’s third-biggest budget deficit. The government set a 2013 target of 4.5 percent of gross domestic product, compared with a 6.3 percent goal for this year.
“The whole point of the euro fix is that it creates a window of opportunity for sensible fiscal action and Spain has taken the first steps towards putting that into place,” Michael Shaoul, the chairman of Marketfield Asset Management, told Bloomberg Television.
Gold, Oil
In France, President Francois Hollande will unveil the first Socialist government budget in a decade, with an aim to reduce the deficit to 3 percent of GDP from 4.5 percent in 2012. Hollande seeks to raise taxes by 20 billion euros ($26 billion) next year, including a levy of 75 percent on incomes above 1 million euros. A report today confirmed that France’s economy failed to grow for a third-straight quarter.
Commodities as tracked by the S&P GSCI have risen 11 percent this quarter in the best such performance since March 2011, as central banks in the U.S., Japan, China and Europe, took action to support their economies.
Cash gold rose toward a six-month high, adding 0.2 percent to $1,780.07 an ounce. Bullion climbed to a record priced in euros and Swiss francs yesterday on concern that central banks’ moves to boost economies will devalue currencies, spurring demand for the metal as an alternative investment.
Asian Currencies
Oil for November delivery traded at $92.48 a barrel, increasing 8.8 percent since the end of June. Crude is higher for a second day before a report forecast to show personal spending rose in the U.S., signaling an economic recovery that may boost fuel demand. Three-month copper in London was at $8,263.50 a metric ton.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, added 0.2 percent and has risen 1.8 percent since the end of June, the most since the three months to September 2010.
“When we look at the impact of QE, Asian currencies do particularly well,” Mitul Kotecha, head of global foreign- exchange strategy at Credit Agricole CIB in Hong Kong, said on Bloomberg TV referring to quantitative easing. “I still think we will see some more upside for many Asian currencies.”
Malaysia’s ringgit rose toward a four-month high and the country’s government bonds fell for a third day. Thailand’s baht was set for its biggest quarterly advance in two years and South Korea’s won traded near the strongest level in seven months.
Nike, RIM
The MSCI Asia Pacific Index, which climbed 4.7 percent this quarter, added 0.2 percent before a week-long holiday in China. The gauge is 7.9 percent higher this year, after slumping 17 percent in 2011. The Shanghai Composite Index rose for a second day, extending yesterday’s 2.6 percent jump and taking this month’s gains to 1.9 percent. Japanese shares were the biggest decliners in Asia with the Nikkei 225 Stock Average falling 0.9 percent.
Shares of Nike Inc. and Research In Motion Ltd. may be active after earnings releases yesterday.
Orders for the Nike brand from September to January, excluding currency exchange-rate changes, advanced 8 percent, the world’s largest sporting-goods company said in a statement. Analysts projected a gain of 10 percent. RIM reported a narrower loss than analysts had projected, helped by growth of BlackBerry subscribers in overseas markets such as India, South Africa and Indonesia.
To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Rishaad Salamat in Hong Kong at rishaad@bloomberg.net
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net
