BLBG: Europe Stocks Rise as Gold Drops While Krona, Aussie Fall
European stocks rose for a third day while gold and silver declined before U.S. payrolls data and a euro-area monetary-policy decision. Sweden’s currency tumbled the most since 2011 after the central bank cut rates more than analysts estimated and Australia’s dollar weakened.
The Stoxx Europe 600 Index added 0.4 percent 7:20 a.m. in New York. Standard & Poor’s 500 Index futures increased 0.1 percent after the gauge closed at a record. Gold retreated 0.6 percent and silver declined 0.8 percent. The krona slid 1.8 percent to 9.3225 per euro and Swedish 10-year bond yields dropped three basis points to 1.85 percent. The Aussie slid 0.7 percent versus the dollar after Reserve Bank Governor Glenn Stevens said the currency was “overvalued” by most measures.
The monthly payrolls report comes after ADP Research Institute data yesterday showed U.S. employment rose in June by the most since 2012, with more workers hired than economists projected. The European Central Bank will probably keep rates unchanged after President Mario Draghi enacted unprecedented stimulus last month, economists said before today’s decision.
“It’s hard to say we expect much more from the ECB,” said Tobias Britsch, who helps oversee about $33 billion at Meriten Investment Management GmbH, in Dusseldorf, Germany. “Draghi can keep the markets happy with words and promises that he will act if needed, but in the end he hasn’t really been forced to do so quite yet. He has convinced the market so far.”
The yield on 10-year Treasury notes was little changed at 2.63 percent. It climbed to as much as 134 basis points more than the rate on German bunds yesterday, a 15-year high, reflecting the outlook for higher U.S. interest rates relative to Europe.
Draghi Outlook
All of the 54 economists surveyed by Bloomberg News predict the ECB will keep its benchmark interest rate unchanged at 0.15 percent when its announces the decision at 1:45 p.m. in Frankfurt. Draghi speaks to the press 45 minutes later. Stocks rallied on June 5 after the central bank announced new measures to stimulate lending and said it would begin preparations related for an asset-purchase plan.
The krona fell at least 1 percent against its 16 major peers. Sweden’s Riksbank cut its benchmark rate by 50 basis points to 0.25 percent, while economists had predicted a 25 basis-point reduction. The euro was little changed at $1.3652.
‘Massively Dovish’
Sweden’s rate decision “was massively more dovish than what most people in the market expected,” said Carl Hammer, chief foreign-exchange strategist at SEB AB in Stockholm. The Riksbank wants “to engineer a weaker currency,” he said. “If you deviate a lot from global monetary policy and try to run your own independent monetary policy, you run the risk of a stronger currency.”
Three shares rose for every one that declined in the Stoxx 600, with trading volume 33 percent higher than the 30-day average, according to data compiled by Bloomberg.
Ingenico Group climbed 7.6 percent after the French maker of payment terminals said it’s in talks to acquire online payment-service provider GlobalCollect. K+S AG advanced 2.2 percent after Europe’s largest potash supplier said it will expand its specialty-fertilizer and salt businesses.
Balfour Beatty Plc sank 6.8 percent after the British construction company said some parts of the U.K. construction business have weakened further. Randstad Holding NV (RAND) lost 2.9 percent after Bank of America Corp. lowered its rating on the biggest Dutch staffing company.
Payrolls Rising
In the U.S., Labor Department data at 8:30 a.m. in Washington will probably show employers added 215,000 workers in June and the jobless rate held at an almost six-year low of 6.3 percent, according to a Bloomberg News survey. Another report from the Institute for Supply Management may show services industries, which make up almost 90 percent of the world’s largest economy, expanded last month.
S&P 500 futures expiring in September were little changed today, after the index closed at a record. It’s almost tripled since its March 2009 low. The Dow Jones Industrial Average also rallied to an all-time high yesterday.
Salesforce.com Inc. (CRM) climbed 1 percent in German trading after its chief executive officer said the maker of online customer-management is considering acquisitions of German software providers and system integrators.
Most emerging-market stocks rose, with the MSCI Emerging Markets Index little changed near a 14-month high. Russian stocks gained for a third day, with the Micex adding 0.3 percent, as international talks improved the prospect of a truce in Ukraine.
China Services
The Shanghai Composite Index advanced 0.2 percent to a two-week high, rising for a fourth day, while the Hang Seng China Enterprises Index added less than 0.1 percent. Data showed a mixed picture for the services industry as an official non-manufacturing purchasing managers’ index for June slipped and a gauge from HSBC Holdings Plc and Markit Economics rose. Monthly U.S.
Gold retreated to $1,318.73 an ounce and silver fell to $20.9947 an ounce. Brent dropped 0.6 percent on speculation of more supplies out of Libya after rebels handed over two export terminals. West Texas Intermediate crude fell 0.7 percent.
(The source of China services PMI was corrected in earlier versions of this story.)
To contact the reporters on this story: Nick Gentle in Hong Kong at ngentle2@bloomberg.net; Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editors responsible for this story: Stuart Wallace at swallace6@bloomberg.net Stephen Kirkland
