BLBG:Euro Gains With Italian Bonds; Metals, U.S. Futures Rise
The euro strengthened for a third day against the dollar after the region’s industrial output rose more than forecast and Italian bonds stayed higher as the government sold almost $9 billion of debt. The Swedish krona, metals and U.S. equity-index futures advanced.
The 17-nation currency appreciated 0.3 percent to $1.3490 at 7:15 a.m. in New York. The yield on Italy’s 10-year note fell five basis points to 4.45 percent. Sweden’s krona climbed at least 0.9 percent against all its 16 major peers. S&P 500 futures added 0.2 percent. The Europe Stoxx 600 Index increased less than 0.1 percent. Lead advanced the most among industrial metals. Platinum’s premium to gold rose to a 17-month high and wheat slumped for a third day.
Factory production in the euro area rose 0.7 percent in December from the previous month, beating the 0.2 percent gain forecast in a Bloomberg survey, the European Union’s statistics office said today. Italy sold 6.63 billion euros ($8.9 billion) of bonds of bonds compared with a maximum target of 6.75 billion euros. Sales at U.S. retailers probably grew in January, economists said before a Commerce Department report.
“Market appetite for the euro has improved,” said Neil Jones, head of European hedge fund sales at Mizuho Corporate Bank Ltd. in London. “The situation in the euro zone has gradually improved along with the outlook for the global economy. We expect the euro’s upward momentum to continue.”
The euro gained against 11 of its 16 main counterparts, climbing 0.4 percent versus the yen. The krona jumped 1.1 percent against the U.S. dollar. Sweden’s central bank kept the seven-day repo rate at 1 percent, defying expectations of a cut by nine of the 22 economists surveyed by Bloomberg.
Pound Slides
The pound weakened 0.6 percent versus the dollar after the Bank of England said inflation will remain above its 2 percent target for the next two years and risks to the economic recovery are weighted to the downside. The Dollar Index dropped 0.2 percent. Australia’s currency climbed a second day to $1.0338 after a gauge of consumer confidence surged to a two-year high.
The extra yield investors demand to own Italy’s 10-year debt rather than German bunds narrowed 11 basis points to 277 basis points. Spanish bonds rose, pushing the 10-year yield down seven basis points to 5.25 percent. The rate on 10-year Treasury notes climbed three basis points to 2.01 percent amid reduced demand for the safest bonds.
Two shares gained for every one that fell in the Stoxx 600. Heineken NV climbed 5.1 percent in Amsterdam as the world’s third-biggest brewer reported full-year earnings that beat estimates. PSA Peugeot Citroen, Europe’s second-largest carmaker, advanced 6 percent after posting a narrower-than- projected loss.
SocGen Loss
Societe Generale SA, France’s second-biggest bank, fell 4 percent after reporting a quarterly loss. Storebrand ASA sank 8.3 percent in Oslo after the insurer’s profit missed estimates.
The S&P 500 has risen to within 3 percent of its record of 1,565.15 reached in October 2007. General Electric Co. climbed 3 percent in pre-market trading after agreeing to sell its remaining 49 percent stake in NBC Universal to Comcast Corp., the largest U.S. cable company, for $16.7 billion.
Deere & Co., the world’s largest maker of agricultural equipment, jumped 4.3 percent after profit topped analyst estimates. U.S. companies are beating analysts’ earnings projections by the smallest margin since 2008 and most forecasts have trailed estimates in what investors should consider “warning signals,” according to Wells Fargo & Co.
Of S&P 500 companies whose earnings topped estimates this reporting season, just 53 percent surprised by more than 1 percent, Wells Fargo strategist Gina Martin Adams wrote in a report dated Feb. 11. The so-called beat rate this season is poised to be the lowest since 2008 and 12 percentage points below the 10-year average. About 81 percent of forecasts for next quarter trailed analyst estimates, according to the note.
Obama Speech
In his first State of the Union address since winning re- election, President Barack Obama yesterday called for a higher minimum wage to boost the U.S. economy, vowed to begin talks on a trade agreement with the European Union and spend $50 billion on “urgent” infrastructure projects.
Lead jumped 0.9 percent and aluminum gained 0.7 percent. One ounce of platinum bought as much as 1.0479 ounces of gold today, the most since August 2011, according to Bloomberg data. Wheat fell 0.7 percent to $7.2675 a bushel after dropping to a seven-month low of $7.255 yesterday as rain boosted prospects for the U.S. crop.
The MSCI Emerging Markets Index jumped the most in two weeks, adding 0.6 percent. Samsung Electronics Co. and Hyundai Motor Co. led South Korea’s Kospi Index 1.6 percent higher as a weaker currency boosted exporters’ competitiveness. Turkey’s benchmark gauge added 1.3 percent and the lira gained after the current-account gap was less than economists forecast. Russia’s Micex Index jumped 1.3 percent, snapping a five-day decline, the longest slump since October.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net;
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
