BLBGYen Strengthens Before Greek Bondholder Talks; S&P 500 Index Futures Rise
The yen strengthened the most in a month against the dollar and the cost of insuring government debt rose as bondholders resumed talks with Greece. U.S. stock- index futures increased and Treasuries fell before a report that may show economic growth quickened.
The yen appreciated as much as 0.7 percent against the dollar before trading 0.6 percent higher at 10:15 a.m. in London. The 10-year U.S. Treasury note yield climbed three basis points, and Standard & Poor’s 500 Index futures rose 0.2 percent. The Stoxx Europe 600 Index added 0.1 percent after falling 0.5 percent. The Markit iTraxx SovX Western Europe Index of credit-default swaps linked to 15 governments climbed 7.5 basis points to 330 basis points. Oil gained 0.7 percent to $100.37 a barrel.
Talks on a Greek debt swap made some progress yesterday and continue today, said the Institute of International Finance which represents private creditors. The U.S. economy probably grew in the fourth quarter at the fastest pace of 2011, economists in a Bloomberg survey said before a Commerce Department report today. Ford Motor Co. and Chevron Corp. are among companies scheduled to release earnings.
“Uncertainty over the Greek situation is sending money into refuge currencies such as the yen,” said Toshiya Yamauchi, a senior currency analyst in Tokyo at Ueda Harlow Ltd., which provides foreign-exchange margin-trading services. “That adds to the yen’s outperformance versus the dollar because of the Fed’s monetary easing.”
Yen Rally
The yen rose against all 16 most-traded peers, appreciating 0.6 percent against the euro. The euro was little changed at $1.3097, on course for a second weekly gain.
The yield on the Greek 10-year bond rose six basis points to 33.54 percent, with the price falling to 21.13 percent of face value. The Italian two-year note yield declined four basis points before the government sells as much as 11 billion euros of bills due in 182 and 331 days. The Spanish 10-year bond climbed for the sixth consecutive day, with the yield 13 basis points lower today, while the equivalent-maturity Portuguese yield jumped eight basis points, increasing for the third straight day.
BNP Paribas SA, France’s biggest bank, retreated 3.5 percent as JPMorgan Chase & Co. downgraded the shares to “neutral” from “buy.” BP Plc lost 1.6 percent as a U.S. judge ruled that the U.K. oil company can’t collect losses caused by the 2010 Gulf of Mexico spill from Transocean Ltd. Transocean jumped 8 percent in Zurich trading.
Household Consumption
The U.S. 30-year bond yield advanced three basis points to 3.12 percent, while the decline in the price of the 10-year Treasury pared a weekly advance. Gross domestic product probably grew at a 3 percent annual pace after advancing 1.8 percent in the previous three months, according to the median forecast of 79 economists surveyed by Bloomberg News. Household purchases, which account for about 70 percent of the economy, may have climbed 2.4 percent, the survey showed.
The S&P 500 has advanced 0.2 percent this week. Starbucks Corp. (SBUX) dropped 1.7 percent in German trading after the world’s largest coffee-shop chain reported first-quarter adjusted earnings of 50 cents a share, compared with the average analyst estimate of 49 cents. Juniper Networks Inc. sank 8.1 percent as the second-biggest maker of computer-networking equipment forecast sales and profit that missed estimates.
Sixty-seven percent of the 157 companies in the S&P 500 that have reported results since Jan. 9 have topped analysts’ estimates for per-share profit, according to data compiled by Bloomberg. The gauge is trading at 12.6 times estimated earnings, compared with last year’s low of 11.2 on Aug. 19, data compiled by Bloomberg show.
Brent oil climbed 0.6 percent in London and tin gained 1 percent, making it the best-performing commodity of 80 raw materials, according to data compiled by Bloomberg. Gold advanced 0.2 percent to $1,723.18 an ounce.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
