Spanish bonds rose and Treasuries fell amid speculation the European Union will increase the size of its bailout fund. European stocks and U.S. futures advanced. The gain in the Spanish 10-year note drove the yield six basis points lower to 5.31 percent at 11:35 a.m. London time. Treasury yields climbed four basis points. The Stoxx Europe 600 Index (SXXP) added 0.6 percent and Standard & Poor’s 500 Index futures climbed 0.3 percent. Oil dropped 0.3 percent to $106.53 a barrel in New York as the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong fell for a ninth day. European finance ministers will meet on March 30 to discuss raising a 500 billion-euro ($664 billion) ceiling on the region’s financial firewall. Italian Prime Minister Mario Monti warned that Spain may reignite the debt crisis. German business confidence unexpectedly rose in March, data showed, while the National Association of Realtors may say today more Americans signed contracts to buy previously owned homes last month. “We had positive news, a few reports out there, that Germany will accept the firewall,� said Achilleas Georgolopoulos, a fixed-income strategist at Lloyds Bank Corporate Markets in London. “The market is happy about the firewall.� Italian bonds advanced, pushing the 10-year yield down four basis points to 5.0 percent. Ten-year bund yields climbed four basis points to 1.91 percent. ‘Convincing Decision’ EU Economic and Monetary Affairs Commissioner Olli Rehn said he’s confident ministers will resolve their differences on providing more bailout funding. Speaking yesterday to reporters in Saariselkae, Finland, Rehn said officials “will take a convincing decision on the reinforcement of the firewalls.� The decline in 10-year Treasuries was the first in five days, pushing the yield up to 2.28 percent. Benchmark 10-year yields have risen 31 basis points since the end of February, headed for their steepest monthly increase since December 2010. The U.S. is scheduled to sell $35 billion of two-year notes tomorrow, $35 billion of five-year debt on the following day and $29 billion of seven-year securities on March 29. The Stoxx 600 rallied after fall 2.5 percent last week, the biggest drop of 2012. EasyJet Plc (EZJ) climbed 7.4 percent as Europe’s second-biggest discount carrier forecast a narrower six-month loss. Aberdeen Asset Management Plc, a Scottish fund manager, advanced 2.9 percent after assets under management rose 6 percent in the first two months of the year. The Munich-based Ifo institute said today its business climate index, based on a survey of 7,000 executives, rose to 109.8 from a revised 109.7 in February. Economists forecast it would remain unchanged at the initial February reading of 109.6, according to the median of 44 estimates in a Bloomberg survey. U.S. Home Sales The gain in S&P 500 futures indicated the U.S. equities gauge will advance for a second day. The index of pending home resales climbed 1 percent in February after a 2 percent increase the prior month, according to the median of 33 estimates in a Bloomberg survey. The MSCI Emerging Markets Index (MXEF) lost 0.4 percent. The Hang Seng China Enterprises Index (HSCEI) slid 0.6 percent, its ninth consecutive decline, its longest losing streak since July 2010. The BSE India Sensitive Index (SENSEX), or Sensex, fell 1.8 percent amid concern the government will find it difficult to rein in the fiscal deficit, and as the rupee weakened to a 10-week low. Russia’s Micex Index gained 0.7 percent. The dollar appreciated against 10 of its 16 major peers, strengthening 0.6 percent to 82.81 yen. The euro climbed for a second day against its Japanese counterpart and fell 0.3 percent to $1.3235. China’s yuan rose 0.01 percent to 6.312 per dollar, according to the China Foreign Exchange Trade System, after the central bank set the daily reference rate at a record high. The S&P GSCI (SPGSCI) gauge of 24 commodities declined 0.1 percent. Brent crude was little changed at $125.19 a barrel in London. Zinc dropped 0.5 percent to $1,995.25 a metric ton, while raw sugar slid 1.3 percent to 25.3 cents a pound. To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net To contact the editor responsible for this story: Raj Rajendran at rrajendran4@bloomberg.net

Source