July 10 (Bloomberg) -- The yen and Treasuries rose on speculation the global recovery is faltering while stocks fell in Europe after Renault SA Chief Executive Officer Carlos Ghosn ruled out an economic rebound before 2011. The yen strengthened against all 16 most-traded currencies as of 12:48 p.m. in London, gaining 1.1 percent versus the euro and 0.4 percent compared with the dollar. The Dow Jones Stoxx 600 Index of European shares slipped 0.7 percent, extending its fourth weekly drop, the longest streak since March. China’s exports declined for an eighth month, the state-run Xinhua News Agency cited customs data as showing, underscoring the economy’s dependence on government spending to boost growth. Renault’s Ghosn said on Europe1 radio that next year will be “as difficult as 2009.” The global economy will shrink 1.4 percent this year before expanding 2.5 percent in 2010, the International Monetary Fund said July 8. “Divergent indications from data will cloud the picture and keep investors on the defensive in the near term,” Morgan Stanley currency strategists Sophia Drossos in New York and London-based Emma Lawson wrote in a report. “The yen is likely to be the biggest beneficiary in such an environment.” Futures on the Standard & Poor’s 500 Index retreated 0.8 percent, indicating the benchmark gauge for U.S. equities may extend its fourth straight weekly decline. CIT, IBM Decline CIT Group Inc. slid 17 percent in pre-market New York trading. The Federal Deposit Insurance Corp. is unwilling to guarantee CIT’s bond sales because the commercial lender’s credit quality is worsening, according to people familiar with the U.S. regulator’s thinking. International Business Machines Corp. slipped 1.3 percent in pre-market New York trading. The world’s biggest computer services provider was downgraded to “neutral” from “buy” at Goldman Sachs Group Inc. The Stoxx 600 has slumped 3 percent this week, extending its retreat since June 11 to 7.9 percent on concern that the first global recession since World War II is far from over. Renault, France’s second-largest automaker, slipped 2.1 percent. Ghosn said the expiration of government-backed sales incentives will offset any improvement in demand for cars, preventing a European auto-market recovery in 2010. DnB NOR ASA retreated 4 percent. Norway’s largest bank said net income fell to 1.2 billion kroner ($180 million) from 3.3 billion kroner a year earlier as writedowns on loans and guarantees climbed. The recession may be prolonged because consumers see few signs that job losses and declines in home prices are ending, economists Nouriel Roubini and Robert Shiller said yesterday on Bloomberg Radio’s “Surveillance.” More Stimulus The U.S. needs another stimulus package because President Barack Obama’s initial $787 billion plan hasn’t been implemented fast enough, according to Shiller, a Yale University professor. Roubini, a professor at New York University, said more spending is necessary to avoid stagnation such as that experienced by Japan in the 1990s. The yen advanced most against the Swiss franc, strengthening 1.6 percent. The dollar gained against every one of its 16 peers tracked by Bloomberg except the yen. The euro had its biggest decline against the dollar in a week. Treasuries rose, driving the 10-year yield down 6 basis points to 3.34 percent, as investors reduced bets that the U.S. slump is ending. Crude oil dropped 1.5 percent to $59.53 a barrel in New York trading even after the International Energy Agency said global oil demand will rebound next year, recovering from the fastest drop since the early 1980s. Metals Retreat Copper fell 1.3 percent to $4,831 a metric ton on the London Metal Exchange, leading a retreat in industrial metals, after Ghosn’s comments. The average car contains 2 kilometers (1.2 miles) of copper and alloy cables, according to the International Copper Study Group. The Micex index of stocks in Russia, the world’s biggest energy exporter, slid 1.9 percent to the lowest level since April. The ruble weakened 2.8 percent against the dollar after the Russian central bank cut its main interest rates for the fourth time in less than three months. Hungary’s forint and the Polish zloty weakened against the euro after Handelsblatt reported the International Monetary Fund is discussing aid programs with at least 10 east European governments. The MSCI Emerging Markets Index, a benchmark for equities in 22 countries, declined 0.7 percent. Stock investors pulled more than $500 million from emerging-market funds in the week ended July 8, according to data compiled by EPFR Global. Developing-nation debt dropped, pushing the extra yield investors demand to own the bonds over U.S. Treasuries 9 basis points higher to 4.48 percentage points, according to JPMorgan Chase & Co.’s EMBI+ Index.

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