BLBG: Commodities Gain on China as Spanish Bonds Rally
Commodities gained after China’s exports topped estimates and investors speculated Japan will expand stimulus. Spain’s two-year yield dropped to the lowest in more than two years and the euro strengthened after the country sold more debt than targeted at its first auction this year.
The Standard & Poor’s GSCI gauge of 24 commodities advanced 1 percent at 7:25 a.m. in New York, with aluminum climbing 1.8 percent and oil rising to the highest in more than three months. The yield on Spain’s two-year notes fell 29 basis points to 2.11 percent, the lowest since November 2010, and the euro gained 0.3 percent to $1.3097. S&P 500 Index futures added 0.3 percent and the Stoxx Europe 600 Index rose less than 0.1 percent.
China’s overseas sales rose 14.1 percent in December from a year earlier, almost triple the 5 percent gain predicted in a Bloomberg analyst survey, data showed today. Spain sold 5.8 billion euros ($7.6 billion) of bonds, more than the maximum target of 5 billion euros. Japan is considering new measures to stabilize the currency market using a special account in its foreign-exchange fund, according to a draft of proposals obtained by Bloomberg News.
“China is back on the growth path and the imports of industrial metals will continue to remain strong,” said Eugen Weinberg, the head of commodity research at Commerzbank AG in Frankfurt. “Copper is likely to remain in focus.”
Copper Climbs
The S&P GSCI advanced to the highest since Jan. 2 with copper climbing 0.8 percent. China is the world’s biggest user of industrial metals and energy. West Texas Intermediate oil jumped as much as 1.7 percent to $94.70 a barrel.
S&P 500 futures rose, indicating the equity benchmark will climb for a second day. A Labor Department report at 8:30 a.m. in Washington will show that initial jobless claims declined last week, according to the average economist estimate in a Bloomberg News survey.
The Stoxx 600 was little changed after rising yesterday to a 22-month high. Marks & Spencer Plc slid 4.2 percent after the U.K.’s largest clothing retailer posted quarterly sales that missed analysts’ estimates. The company said it offered fewer promotions over the Christmas holiday than a year earlier. Tesco Plc gained 2.3 percent after reporting its strongest sales growth since 2010.
MAN SE jumped 4.6 percent as Volkswagen AG offered to take full control of the German truckmaker. Europe’s largest carmaker already holds 75.03 percent of MAN’s voting rights.
Spanish Auction
The yield on Spain’s 10-year bond fell 19 basis points to 4.95 percent, falling below 5 percent for the first time since March. The rate on Italy’s two-year note slid 19 basis points to 1.35.
Borrowing costs fell at Spain’s auction with the 2015 note yielding 2.476 percent, compared with 3.282 percent the last time a similar maturity was sold on Oct. 4. The yield on the 2018 bond was 3.988 percent, down from 4.680 percent at the previous sale on Nov. 8.
U.K. 10-year inflation-linked gilts advanced, pushing the yield on the securities to a record-low minus 0.99 percent, after National Statistician Jil Matheson said the U.K. should maintain its current approach to calculating its retail price index, easing investor concern changes to the measure may have impaired payments on inflation-linked bonds.
The euro gained against 10 of its 16 major counterparts, advancing 0.5 percent versus the yen. Japan’s currency slipped 0.3 percent against the dollar.
New Issues
Europe’s junk bond market opened for the year with Fresenius SE & Co., the German medical equipment maker, and French facilities service provider La Financiere Atalian offering new issues. The deals will help push this week’s total debt sales to more than 13 billion euros ($17 billion), according to data compiled by Bloomberg.
U.S. Treasury 30-year bonds fell, pushing the yield two basis points higher to 3.08 percent, as money managers prepared to bid at a $13 billion auction of the securities today.
The MSCI Emerging Markets Index (MXEF) added 0.4 percent, snapping a three-day decline. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose 1 percent. South Korea’s Kospi index jumped 0.8 percent and Taiwan’s Taiex added 0.9 percent. Brazil’s Bovespa index gained 0.3 percent.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
