New ECB measures may come this year as growth falters Treasury delays 2-year note auction on debt-ceiling risks Share on Facebook Share on Twitter Global equities resumed their October rally while the euro weakened after the European Central Bank signaled that additional monetary stimulus is at the ready if growth continues to falter. European stocks surged to a two-month high and bonds in the region jumped. American equities joined the rally, with gains underpinned by strong results from blue-chip companies. The euro tumbled to a three-week low. The Treasury put off a two-year note auction, as an impasse over the debt limit constrains the nation’s borrowing. Draghi “opened the door widely for an extension of QE,� said Guillermo Hernandez Sampere, who helps manage about 150 million euros ($170 million) as head of trading at MPPM EK in Eppstein, Germany. “It was what the market wanted to hear. It will be a positive outcome for the equity market.� The ECB became the latest central bank to signal a willingness to loosen monetary policy if slowing international growth and tepid inflation continue. The move sparked purchases of risk assets from oil to metals and emerging-market assets. U.S. equities resumed their rally this month, as results from McDonald’s Corp. and EBay Inc. beat projections and data indicated sales of existing homes rose to the second-highest level since 2007. Draghi said officials will reexamine the scope of their quantitative-easing plan in December. The bond purchases, originally due to end next September, will continue until the ECB sees a sustained increase in the inflation outlook, he told reporters. Policy makers discussed a further cut to the bank’s negative deposit rate, he said. Currencies The euro weakened to $1.1166 as of 10:09 a.m. in New York. It was down against all major peers. The Bloomberg Dollar Spot Index, a gauge of the currency against 10 major peers, rose 0.5 percent, heading for a sixth day of gains. Bonds Yields on 10-year German government bonds fell four basis point to 0.53 percent, and French yields fell the same amount to 0.88 percent. Yields on Italian and Spanish bonds dropped at least six basis points. Yields on U.S. Treasuries due in a decade were little changed at 2.03 percent. Two-year note yields fell as the Treasury Department postponed an Oct. 27 auction of the securities. Russian government bonds advanced for a second day as slower consumer-price growth boosted expectations the central bank will resume interest-rate cuts to buttress the economy. Stocks The Stoxx Europe 600 Index jumped 1.2 percent, heading for the highest close since Aug. 20. Orange SA gained 6.1 percent on an increased annual earnings forecast. Roche Holding AG, the world’s biggest maker of cancer drugs, added 2 percent on higher sales. The Standard & Poor’s 500 Index rose 1.1 percent. EBay jumped 10 percent after results surpassed analysts’ estimates and on plans for a $599 million stock buyback. McDonald’s climbed 6.9 percent on better-than-expected results. Valeant Pharmaceuticals International Inc. sank 15 percent, adding to its 19 percent rout yesterday. U.S. data also showed jobless claims last week hovered near the lowest level in four decades. Emerging Markets The MSCI Emerging Markets Index was little changed. South Korean shares dropped 1 percent. The Shanghai Composite Index rose 1.5 percent, rebounding from its steepest loss in a month. Turkish shares gained 0.4 percent. The zloty added 0.4 percent versus the euro, its first gain in six days. The Polish currency reached its weakest level in nine months this week before Oct. 25 elections. The opposition Law & Justice party has presented plans heralding a softer approach to monetary policy. Opinion polls suggest the party will win the vote. It’s not clear whether it will get an overall majority. Commodities Copper futures climbed 1.5 percent to $5,250.50 a metric ton in London, the first advance in five days, amid signs that growth of refined-metal supply in China is slowing. Aluminum rose, reversing an earlier decline, along with zinc and nickel. West Texas Intermediate crude gained 1.2 percent to $45.76 a barrel and Brent added 1.9 percent to $48.26. Data showed U.S. crude stockpiles expanded more than twice as much as forecast.

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