BLBG:Stocks, Euro Advance As Merkel Supports ECB Plan; Platinum Gains
Stocks (MXWD) rose to a three-month high and the euro advanced to its strongest level in six weeks versus the yen after Germany signaled its support for a European Central Bank plan to resolve the debt crisis.
The MSCI All-Country World Index of stocks added 0.1 percent as of 8:02 a.m. in London, headed for its best close since May 3. The Stoxx Europe 600 Index gained 0.3 percent and the MSCI Asia Pacific Index rose 0.4 percent. Futures on the Standard and Poor’s 500 Index fell 0.1 percent after the gauge ended yesterday at a four-month high. The Australian dollar weakened against all 16 major peers. Platinum rose after police shot and killed striking workers at a mine in South Africa.
German Chancellor Angela Merkel said yesterday in Ottawa the ECB’s insistence on conditionality in return for helping cut borrowing costs for indebted governments matches her priorities. An index of leading economic indicators in the U.S. rose in July, a report is forecast to show today after applications for construction permits rose to the highest since August 2008.
“The U.S. economic deterioration is being curtailed,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “Euro-region officials are going along with the ECB, reducing uncertainty. There’s less anxiety out there so we should see investors continuing to buy.”
The Stoxx Europe 600 Index is headed for an 11th weekly gain, the longest winning streak since January 2006. The benchmark index has surged 16 percent since reaching this year’s low on June 4.
Asian Stocks
More than three stocks rose for every two that fell on the MSCI Asia Pacific Index. The gauge is within 0.1 percent of an Aug. 9 close that was the highest since May 8. Shares on the benchmark index trade at 12.5 times estimated earnings, compared with 13.7 for the S&P 500 Index and 11.7 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Yamaha Motor Co. surged 6.7 percent today after Credit Suisse Group AG recommended investors buy shares of the Japanese motorcycle maker. Samsung Electronics Co., South Korea’s largest exporter, fell 3.7 percent as it rested its case in a U.S. patent-infringement trial with Apple Inc.
The euro strengthened 0.1 percent to 98.17 yen, earlier touching 98.27, the highest level since July 6. The shared currency is set to complete a weekly gain against all 16 major counterparts before Germany’s Merkel meets French President Francois Hollande on Aug. 23 and Greek Prime Minister Antonis Samaras a day later.
‘Real Progress’
“We’re starting to see the early signs of some real progress being made in the euro area,” said Andrew Salter, a currency strategist in Sydney at Australia & New Zealand Banking Group Ltd. “We do see the euro rebounding modestly over the next few months.”
The so-called aussie weakened after the nation’s Treasury said the central bank would be able to ease monetary policy if the currency’s gains are hurting the economy. Australia’s dollar fell 0.4 percent to $1.0446.
Oil in New York has climbed more than 2 percent this week as increases in U.S. retail sales, industrial output and building permits for July beat economists’ expectations. Crude also gained as U.S. stockpiles dropped and consumption last week reached a nine-month high, according to Energy Department data released on Aug. 15. Oil for September delivery fell 0.5 percent to $95.12 a barrel today.
Platinum gained 0.6 percent, extending yesterday’s 3.3 percent advance, after police said they fired on striking miners near Lonmin Plc’s Marikana platinum mine in South Africa yesterday in response to an attack. The South African Press Association said 18 people were killed or injured in the clash.
Rubber Advances
Rubber rose a third day, set for the first weekly gain in six after Thailand, Malaysia and Indonesia agreed to cut exports by 300,000 metric tons to boost prices. The January-delivery contract rose 4.2 percent to 220.10 yen a kilogram in Tokyo.
Treasuries headed for a fourth weekly loss, the longest run of declines since 2010, before an industry report economists said will show an index of leading U.S economic indicators gained. The 10-year yield fell one basis point to 1.83 percent today, trimming this week’s increase to 17 basis points, according to data compiled by Bloomberg.
U.S. government securities have handed investors a 1.6 percent loss this month, Bank of America Merrill Lynch indexes show, as the nation’s economy showed signs of improvement and progress was made in tackling Europe’s debt crisis.
To contact the reporter on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net
To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net
