European stocks reached a 17-month high and commodities gained after Chinese manufacturing data added to signs of economic recovery. The dollar slid to a six- week low versus the euro as U.S. debt talks remained deadlocked. The Stoxx Europe 600 Index (SPX) added 0.5 percent and futures on the S&P 500 Index rose 0.2 percent as of 10:59 a.m. in London. The Standard & Poor’s GSCI Index of raw materials increased 0.3 percent, led by natural gas and wheat. The Dollar Index (DXY) sank to a one-month low while the euro reached $1.3049, the most since Oct. 23. The yield on the 10-year Greek bond fell below 15 percent for the first time since July 2011, while Turkey’s ISE National 100 Index (XU100) of stocks climbed to a record. A manufacturing gauge in China rose to a seven-month high in November, data released Dec. 1 showed. U.S. Treasury Secretary Timothy F. Geithner said Republicans in Congress will be responsible for hurting the economy if they refuse to raise tax rates on the highest-income earners as part of a deal. House Speaker John Boehner said the White House is wasting time. Chancellor Angela Merkel opened the possibility that Germany may ultimately accept a write-off of Greek debt. “The Chinese economy is bottoming but we’re not expecting a rapid acceleration in growth,� Steve Brice, the chief investment strategist at Standard Chartered Plc in Singapore, said on Bloomberg Television’s “On the Move Asia.� “We’ve got to get past the fiscal cliff, and news on that over the weekend has not been encouraging.� Stimulus Speculation Stocks, bonds, commodities and the dollar all posted monthly gains in November for the second time this year amid optimism central bank stimulus programs are bolstering growth in the world’s biggest economies. The rally may stall as talks on how to avoid more than $600 billion in spending cuts and tax increases, known as the U.S.’s fiscal cliff, are at a stalemate. Three shares advanced for every one that fell in the Stoxx Europe 600 (SXXP), which climbed 0.9 percent last week to reach the highest level since June 2011. Rio Tinto Group and BHP Billiton Ltd. led mining companies higher today. Cable & Wireless Communications Plc rallied 5.4 percent after agreeing to sell its Monaco and Islands unit to Bahrain Telecommunications Co. for $680 million. The euro strengthened 0.4 percent to $1.3032 after earlier touching $1.3049. The dollar dropped 0.4 percent to 82.13 yen. There’s “clearly a chance� that there won’t be an agreement in time to avert the fiscal cliff, Boehner told “Fox News Sunday.� “I would say we’re nowhere, period,� he said. Dollar Index The Dollar Index declined to as low as 79.918, the least since Nov. 1, before a report today that may show manufacturing in the U.S. expanded at a slower pace last month. Data may show on Dec. 7 that U.S. payrolls rose by 90,000 last month, the smallest gain since June, as superstorm Sandy forced businesses to close. The Australian dollar dropped versus 15 of 16 major counterparts, sliding 0.1 percent to $1.0419. The Reserve Bank of Australia will return interest rates to a half-century low of 3 percent tomorrow, economists predict, as data today showed manufacturing contracted and retail sales stagnated. New Zealand’s dollar weakened versus most peers after data showed the nation’s terms of trade worsened. China’s official Purchasing Managers’ Index was 50.6 in November, while a private gauge of manufacturing climbed to 50.5, separate reports showed. Nine of 16 analysts surveyed over the past two weeks by Bloomberg forecast China will set an economic growth goal of 7.5 percent, unchanged from 2012, in a sign that new leadership headed by Xi Jinping won’t tolerate a bigger slowdown from the lowest target since 2004. Natural Gas Commodities measured by the S&P GSCI reached 653.40, the highest level since Oct. 22. Natural gas advanced 1.1 percent in New York, the first gain in four days, and wheat climbed after the U.S. won part of a tender to supply the grain to Egypt, the largest importer. Corn jumped 1 percent. Oil traded near a two- week high in New York. Gold rose as much as 0.3 percent to $1,720.45 an ounce as investors boosted holdings in exchange-traded products backed by bullion to a record 2,621.73 metric tons Nov. 30, according to data compiled by Bloomberg. Silver increased 0.2 percent to $33.483 an ounce. Emerging-market stocks fell 0.4 percent, declining for the first time in three days. Hong Kong’s Hang Seng (HSI) index slumped 1.2 percent, the steepest drop since Nov. 15. The BSE India Sensex 30 Index slid 0.2 percent, retreating from the biggest weekly jump in six months. Turkey’s ISE National 100 Index rose 0.7 percent, heading for the highest close since at least January 1988, as the nation’s inflation rate fell to the lowest in 14 months, giving the central bank more room to reduce borrowing costs. To contact the reporters on this story: Matthew Brown in London at mbrown42@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editors responsible for this story: Rocky Swift at rswift5@bloomberg.net; Stuart Wallace at swallace6@bloomberg.net

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