BLBG: Euro Rises With Treasuries Amid Tensions; Nickel Rebounds
The euro climbed against most peers and U.S. Treasuries rose with gold amid violence in Ukraine and tensions between Vietnam and China. Nickel led gains in commodities, the benchmark gauge of European equities slid and Chinese shares fell after weaker home-price data.
The joint currency advanced 0.2 percent against the greenback by 8:20 a.m. in London, and was stronger against 13 of 16 major peers. Gold climbed and the yield on 10-year U.S. Treasuries decreased 2 basis points. The S&P GSCI Index of commodities rose 0.4 percent as nickel rebounded 2.8 percent, copper touched its highest since March and oil gained. Chinese stocks retreated. The Stoxx Europe 600 Index slipped 0.2 percent as AstraZeneca Plc plunged 13 percent in London. Standard & Poor’s 500 Index futures were little changed.
Clashes continued in Ukraine’s east between government forces and pro-Russian rebels who have declared an independent state. Ships are evacuating Chinese citizens from Vietnam after a maritime dispute sparked violent protests and damage to factories there, the official Xinhua News Agency said. China’s home prices rose in the fewest cities in 1 1/2 years in April, according to data issued yesterday, while the central bank ordered banks to curb interbank lending as it seeks reduce so-called shadow banking.
“There is uncertainty surrounding presidential elections in Ukraine and rising tensions between China and Vietnam,” said Toshiya Yamauchi, a senior analyst in Tokyo at Ueda Harlow Ltd., which provides margin-trading services. “Demand for U.S. Treasuries will continue to be supported by risk aversion, limiting the upside in dollar-yen, It’s not an environment where investors want to aggressively take risks.”
Housing Data
Ten-year Treasury yields fell to 2.51 percent today, after rising three basis points, or 0.03 percentage point, on May 16. The euro bought $1.3721 and 139.14 yen. The yen climbed as high as 101.24 to the dollar, the highest since March 17, before trading at 101.40.
Russia’s ruble was little changed at 34.747 per U.S. dollar and traded at 47.6716 to a euro. The Micex Index climbed 0.7 percent in Moscow after capping a third straight weekly increase.
Gazprom OAO advanced 1.1 percent to 145.82 rubles. The stock is extending its longest streak of daily gains since at least 2006 as traders read President Vladimir Putin’s visit to China this week as a sign Russia is on the verge of agreeing a long-term gas-supply contract with Asia’s biggest economy.
Ukraine Clashes
Ukrainian government forces continued their offensive in the former Soviet republic’s east, killing one rebel and losing a police station before the presidential election scheduled for May 25. Separatists prepared for a vote in the fall after declaring independence, saying they want to join Russia. The insurgents hold buildings as well as radio and television towers in about 15 Ukrainian cities.
Nickel climbed to $19,530 a metric ton on the London Metal Exchange after falling 4.4 percent last week, while copper rose 1.2 percent to $6,941.75 a ton after reaching $6,954, the priciest since March 7.
Nickel gained for the first time in three days in London May 16, cutting its weekly decline after rallying 9 percent the previous week. Macquarie Group Ltd. says demand for the metal will exceed production for the next five years as consumers seek to replace supply from Indonesia, which banned ore exports in January. Russia is also the world’s second-biggest producer of refined nickel.
“Commodities are getting some support from the rising tensions in Asia’s geo-politics,” said Fang Junfeng, Shanghai-based analyst at Shanghai Cifco Futures Co., referring to the conflict between China and Vietnam.
Oil Rallies
West Texas Intermediate crude oil rose 0.5 percent to $102.55 a barrel today, after gaining 2 percent last week. Brent crude futures added 0.4 percent to $110.19 a barrel. Escalating tensions in Ukraine and signs of improvement in the U.S. economy stoked WTI’s second straight advance last week.
AstraZeneca was the biggest drag on the Stoxx 600 today after it rejected a sweetened 69.4 billion-pound ($117 billion) takeover offer from Pfizer Inc. as too low, saying the bid fails to reflect the value of the U.K. drugmaker’s pipeline of experimental medicines.
About five stocks fell for every four that advanced on the Asia-Pacific gauge today. Property firms led declines on the Hang Seng Index, while all but eight stocks out of 40 companies on the Hang Seng China Enterprises index fell. The Shanghai Composite Index slid 1.1 percent.
Sun Hung Kai Properties Ltd., the world’s third-largest real-estate company, dropped 1.1 percent in Hong Kong. Beijing Airport High-Tech Park Co. slid 3.1 percent in Shanghai.
Prices for new homes in China climbed in 44 of 70 cities tracked by the government last month, compared with 56 cities in March, with property developers offering discounts amid a slowdown in the world’s second-largest economy. Home prices in Beijing rose 0.1 percent from March, the smallest increase since September 2012, while prices in Shanghai gained the least since November 2012, according to statistics bureau data.
Ringgit Gains
Chinese ships have begun arriving in Vietnam to evacuate citizens after violent demonstrations over the placement of an oil rig in disputed waters. More than 3,000 Chinese nationals had been evacuated as of May 17, Xinhua reported, citing the Foreign Ministry. Security forces in Vietnam worked to quell protests in Hanoi and Ho Chi Minh City after factories were damaged and two people were killed last week.
Foreign investors were net buyers on the Ho Chi Minh City Stock Exchange every day since April 18, the longest stretch of purchases since January, as valuations declined to a four-month low. They added about $93 million to their holdings even as the benchmark VN Index slumped 8.8 percent. The gauge was 0.2 percent lower today.
Malaysia’s ringgit appreciated to 3.2110 per dollar, after weakening 0.2 percent last week. Data on May 16 showed the economy expanded at the fastest pace in five quarters, beating economists’ estimates.
Wheat for July delivery sank as much as 1.3 percent before paring the decline to 0.4 percent in Chicago. Corn dropped to $4.82 a bushel and soybeans climbed. Prices dropped 10 percent from a 14-month high on May 6 after the U.S. government predicted ample global supplies, even as local production falls.
Canada, the biggest exporting country of the grain after the U.S., increased its estimate for national wheat-production area. Russia is the world’s fifth-largest wheat harvester, followed by Ukraine.
To contact the reporters on this story: Nick Gentle in Hong Kong at ngentle2@bloomberg.net; Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net
To contact the editors responsible for this story: Nick Gentle at ngentle2@bloomberg.net Sarah McDonald
