BLBG: S&P 500 Futures Climb With Italian Bonds as Pound Climbs
Standard & Poor’s 500 Index futures rose while Spanish and Italian bonds gained and oil advanced. The pound strengthened for a fifth day against the dollar after retail sales beat estimates and the Bank of England said arguments favoring a rate increase are growing.
S&P 500 futures increased 0.3 percent at 10:50 a.m. in London. The Stoxx Europe 600 Index added 0.1 percent after losing as much as 0.5 percent. The pound climbed 0.3 percent to $1.6892 and the yield on 10-year gilts rose three basis points to 2.64 percent. The rate on Italian bonds fell six basis points to 3.21 percent. Japan’s currency advanced to a three-month high. Oil rose 0.8 percent and palladium extended gains to the highest price since August 2011.
U.K. retail sales increased for a third month in April and the BOE said in minutes of its last meeting that the policy decision was becoming “more balanced” for some committee members. The Federal Reserve releases its minutes today, with Chair Janet Yellen set to give a speech after saying last week the U.S. economy hasn’t fully recovered.
Stocks fell in the U.S. yesterday for the first time in three days after retailers reported lower-than-estimated earnings and small-cap shares slumped. Lowe’s Cos., Target Corp., Tiffany & Co. and L Brands Inc. are due to release results today. About 75 percent of those that have reported this season beat profit estimates, while 53 percent exceeded sales projections, data compiled by Bloomberg show.
BNP Drops
BNP Paribas SA, France’s largest bank, lost 1.5 percent after a person familiar with the matter said U.S. authorities are seeking more than $5 billion to settle investigations related to sanctions
Volvo AB dropped 1.6 percent after the world’s second-largest truckmaker said deliveries fell more than analysts had projected in April.
A.P. Moeller-Maersk A/S gained 3.4 percent after raising its profit forecast for 2014. Its container-shipping line, the world’s largest, also reported that first-quarter profit more than doubled. Petrofac Ltd. (PFC) gained 2.5 percent after Barclays Plc increased its rating on the U.K.’s largest oil-services company.
The Hang Seng China Enterprises Index recovered from earlier losses, rising 1.1 percent, while the Shanghai Stock Exchange Composite index added 0.8 percent. The gauges are rebounding after the latter dipped below the 2,000 threshold that analysts have cited as a trigger for state-linked funds to enter the market and policy makers to announce measures to prop up growth.
China Outlook
Moody’s Investors Service revised its outlook for China’s property industry to negative from stable today, citing a slowdown in home sales growth as liquidity weakens and inventories rise in the coming 12 months. The outlook change is the first by the credit-rating company on China’s property market since November 2012.
India’s rupee fell the most in a month, declining as much as 0.4 percent, on speculation importers boosted dollar purchases to pay bills. The currency, which reached the strongest level since June this week, traded down 0.3 percent.
The yen rose to as strong as 100.82 per dollar, before trading at 100.99. Japan’s moderate economic rebound is continuing, Bank of Japan Governor Haruhiko Kuroda said after the central bank maintained its bond-buying program.
Prefer More
“The Bank of Japan is happy to sit and wait and see,” said David McDonald, Sydney-based chief investment strategist for the private banking and wealth management division of Credit Suisse Group AG, which manages $1.4 trillion for clients. “We’d prefer them to be more aggressive. We still expect the BOJ will do something more later in the year.”
Spains 10-year yield dropped four basis points to 3.05 percent. The rate on 10-year Treasury notes rose two basis points to 2.53 percent and its also two basis points on German bunds, at 1.42 percent.
The S&P GSCI (SPGSCI) gauge of 24 commodities rose 0.3 percent, the fourth consecutive advance and the longest streak since April 17. West Texas Intermediate oil jumped to $103.16 a barrel. Crude supplies shrank 10.3 million barrels last week, the American Petroleum Institute reported yesterday. Palladium climbed as much as 0.5 percent to $829.36 an ounce.
To contact the reporters on this story: Emma O’Brien in Wellington at eobrien6@bloomberg.net; Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editors responsible for this story: Stephen Kirkland at skirkland@bloomberg.net Claudia Carpenter
