SG:Dollar Rises Before U.S. Talks; European Shares Little Changed
Nov. 16 (Bloomberg) -- The dollar and the yen strengthened as U.S lawmakers prepared for talks to resolve the country’s so- called fiscal cliff. European stocks and U.S. index futures were little changed, while Treasuries gained.
The dollar and the yen gained against most of their major peers at 8:12 a.m. in London. The Stoxx Europe 600 Index rose 0.2 percent and futures on the Standard & Poor’s 500 Index added 0.1 percent. Japan’s Topix Index capped its biggest two-day advance in 19 months. Gold headed for a weekly loss. The yield on U.S. 10-year notes fell one basis point to 1.59 percent.
President Barack Obama will hold an opening round of talks with Congressional leaders today to reach a deficit-reduction deal to avert $607 billion in automatic tax increases and spending cuts. U.S. industrial production probably cooled in October as super storm Sandy knocked out power in the Northeast, economists said before a report today.
“People are being a bit more prudent,” said Ali Jalai, who trades U.S. debt in Singapore at Scotiabank, a unit of Bank of Nova Scotia. “They are worried about the fiscal cliff.”
The MSCI Asia Pacific Excluding Japan Index slid 0.2 percent. The measure has dropped 2 percent this week, heading for its biggest loss since the five days to July 13. China’s CSI 300 Index slumped 0.8 percent today to its lowest level since March 2009.
Japan Polls
The Topix climbed 1.9 percent, extending yesterday’s 2.1 percent rally, on signs next month’s elections in Japan will be won by an opposition party that advocates unlimited monetary stimulus. Mazda Motor Corp. and Nikon Corp. surged more than 7 percent in Tokyo, pacing gains by exporters, as the yen’s 2 percent depreciation against the dollar this week boosts their earnings outlook.
Fraser & Neave Ltd. climbed 2 percent in Singapore. Overseas Union Enterprise Ltd. offered S$13.1 billion ($10.7 billion) for the conglomerate with assets spanning from soft- drinks to property, challenging Thai billionaire Charoen Sirivadhanabhakdi’s efforts to buy the company.
In the U.S., output at factories, mines and utilities probably rose 0.2 percent in October, after gaining 0.4 percent in the prior month, according to the median estimate of economists in a Bloomberg poll before the data release today.
Fiscal Cliff
The dollar gained to $1.2753 per euro.
Tax questions will be central today when Obama holds his first face-to-face conversation with House Speaker John Boehner since the presidential election. At the White House meeting on the fiscal cliff, Obama also will host House Minority Leader Nancy Pelosi, a California Democrat, Senate Majority Leader Harry Reid, a Nevada Democrat, and Senate Minority Leader Mitch McConnell, a Kentucky Republican.
The yen added 0.5 percent to 103.28 per euro following a 1.5 percent drop yesterday, the biggest slide since Sept. 14.
Japan’s Prime Minister Yoshihiko Noda dissolved parliament today, triggering an election on Dec. 16 that polls suggest his Democratic Party of Japan will lose. Shinzo Abe, the leader of the main opposition Liberal Democratic Party, said yesterday the Bank of Japan should pursue unlimited monetary stimulus to end deflation.
The Singapore dollar dropped to $1.2275 in its biggest daily loss since July. The economy will grow 1 percent to 3 percent in 2013 after expanding about 1.5 percent this year, the Trade Ministry said today. It previously forecast growth of as much as 2.5 percent in 2012.
Gold was little changed at $1,715.03 an ounce, falling 1 percent this week. Platinum dropped 0.5 percent.
Crude for December delivery, which expires today, was little changed at $85.58 a barrel in New York after falling 0.6 percent this week.
Israeli Defense Minister Ehud Barak signaled that Israel is ready to escalate its military operations against Gaza after at least one long-range missile was fired at Tel Aviv by Palestinian militants.
