BLBG:Euro Gains as Metals Advance; Yen Weakens on Stimulus
The euro strengthened to a five-week high against the dollar, metals rose and European stocks headed for the longest monthly rally since 2006. The yen weakened as the country approved additional stimulus.
The euro appreciated 0.2 percent to $1.3003 at 6:05 a.m. in New York. The Stoxx Europe 600 Index (SXXP) increased 0.1 percent, poised for a sixth month of gains. Futures on the Standard & Poor’s 500 Index added less than 0.1 percent. Copper jumped to a one-month high and aluminum increased 1.3 percent. The perceived risk of corporate default has fallen 30 percent in the past six months. The yield on Japan’s benchmark 10-year note fell 1 1/2 basis points to 0.695 percent, the lowest since June 2003.
Stocks, commodities, bonds and the euro rose this month on signs of growth in the U.S. and Asia and speculation political leaders in America and Europe will take steps to keep their economies from deteriorating. Japan’s cabinet approved 880 billion yen ($10.7 billion) of stimulus and the nation’s factory output unexpectedly gained. While a Bundesbank report today indicated Germany’s retail sales declined last month, a Bloomberg investor poll showed confidence in China’s economy is at the highest in more than a year.
“The fears around the euro-crisis have come down a lot,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. “We’ve also seen signs of recovering growth in the Chinese and U.S. data and markets are betting on a global recovery in 2013.”
The Stoxx 600 has climbed 1.1 percent this week, extending the November advance to 2.2 percent. Porsche SE led a gauge of automakers higher today, rising 2.9 percent. Gecina SA retreated 4.5 percent as Grupo PRA sold a 1.5 percent stake in Paris’s largest publicly traded office landlord.
Consumer Spending
The S&P 500 closed at a three-week high yesterday. A Commerce Department report at 8:30 a.m. in Washington may show spending by U.S. consumers stagnated in October. Household purchases were unchanged last month, the weakest reading since June, after advancing 0.8 percent in September, according to the median estimate of 79 economists surveyed by Bloomberg.
The euro appreciated 0.8 percent versus the yen, extending this month’s advance to 3.8 percent. It was also headed for a fourth-straight monthly gain versus the dollar.
German lawmakers approved today Greece’s latest rescue package designed to ease terms for aid for Greece and help resolve the three-year-old debt crisis.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding Japan, rose for a sixth month, touching the strongest level since September 2011.
Corporate Risk
The Markit iTraxx Europe index, a benchmark for corporate credit risk, headed for a six month of declines, dropping more than 30 percent during the period. The index of credit-default swaps linked to 125 investment grade companies fell one basis point today to 122, and is down from 177 basis points at the end of May.
Copper rose as much as 0.8 percent to $7,965 a metric ton, the highest since Oct. 23. Natural gas dropped 0.4 percent to $3.632 per million British thermal units, after slumping 4 percent yesterday. Oil in New York is up 2.1 percent this month at $88.01 a barrel, after falling 11 percent in September and October. The S&P GSCI gauge of 24 commodities fell less than 0.1 percent, trimming this month’s gain to 1.8 percent, the first monthly advance in three months.
European Union carbon permits dropped as much as 10 percent to a record 5.89 euros a metric ton after nations delayed a vote on a plan to temporarily cut supply of allowances in the three years through 2015.
The MSCI Emerging Markets Index (MXEF) climbed 0.4 percent, extending this month’s advance to 1.3 percent. India’s Sensex index added 0.9 percent to a 19-month high as the country’s quarterly gross domestic product growth matched estimates. The Shanghai Composite Index (SHCOMP) increased 0.9 percent, rebounding from the lowest valuation on record. Russia’s Micex Index gained 0.6 percent and benchmark gauges in Taiwan and Thailand added more than 1 percent.
Poland’s zloty fell 0.4 percent against the euro after economic growth slowed more than economists forecast in the third quarter.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jason Clenfield in Tokyo at jclenfield@bloomberg.net;
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
