WSJ:European Stocks Rise, Euro Advances on German Data
By Nina Bains
European stocks rose, while the euro touched session highs against the dollar after German confidence data surpassed expectations.
The ZEW economic expectations index, a gauge of German investor sentiment, rose to 6.9 in December, a sharp reversal of the minus 15.7 figure seen in the previous month and well above forecasts.
It was the first time the index has been in positive territory since May, suggesting that investors are feeling more optimistic about the outlook for the euro zone's largest economy. The data sent the euro to a session high of $1.2976.
Still, some analysts remained cautious. "December's rise in ZEW investor sentiment provides only limited hope for the German economy given clear signs of a downturn in the recent hard data," said Jennifer McKeown, senior European economist at Capital Economics.
"Hard data on trade and industrial production suggest that the economy is very likely to contract in the fourth quarter and the business surveys also paint a gloomy picture."
Elsewhere, Greece's national benchmark equity index soared ahead of a deadline on participation in the country's debt buyback program.
The country extended its deadline to 1200 GMT Tuesday after failing to meet its target by close of the original Friday deadline.
The Greek government hopes to retire some 20 billion euros ($25.8 billion) of debt through the exercise, a condition that must be met for Greece to receive its next tranche of EUR34.4 billion of financial aid.
Euro-zone finance ministers will meet in Brussels Thursday to discuss the outcome of the debt buyback operation and sign off the disbursement of funds to Greece.
Ahead of this meeting, the finance ministers will hold preliminary talks during a teleconference Tuesday.
Elsewhere, government borrowing costs eased in Spain and Italy after Spain held a successful treasury bill auction. Spain's borrowing costs fell as it sold 3.89 billion euros of 12-month and 18-month Treasury bills, more than planned.
U.S. stock futures edged tentatively higher ahead of the Federal Open Market Committee's two-day meeting, which commences later in the session. It is hoped that the Federal Reserve may give an indication of the central bank's policy direction in the coming months.
Also in focus are U.S. budget negotiations in Washington. People familiar with the matter told The Wall Street Journal that negotiations between the White House and House Speaker John Boehner have progressed steadily in recent days. Still, both sides still face sizable differences before any agreement can be reached by the end of the year, these people added.
Asian markets were mixed Tuesday as the positive impact of progress in U.S. fiscal cliff negotiations was partly offset by uncertainty ahead of Japan's election Sunday.
Turning to corporate news, HSBC Holdings PLC said it has reached an agreement with U.S. authorities in relation to investigations regarding anti-money laundering, and will make payments totaling $1.921 billion.
Latest Price Change From Previous Close
FTSE 100 5932.39 +0.2%
DAX 7562.38 +0.4%
CAC-40 3628.28 +0.5%
Stoxx Europe 600 280.25 +0.3%
ASE Composite 868.84 +1.9%
Hang Seng 22323.9 +0.2%
Nikkei 225 9525.32 -0.1%
Shanghai Composite 2074.70 -0.4%
Dow Jones Industrials 13169.80
S&P 500 1418.55
Dec. DJIA Future 13211.00 +0.2%
Dec. S&P 500 Future 1421.90 +0.1%
Level In Late New York Trading
(Previous Session)
EUR/USD 1.2965 1.2942
USD/JPY 82.52 82.35
Change From Previous Close
Dec. German Bund Future 145.34 -0.26
Jan. Nymex Crude Oil 86.03 +0.47
Jan. Brent Crude Oil 108.12 +0.79
Gold 1709.80 -2.70
