BLBG:Yen, Oil Rally as European Stocks Climb to One-Month High
The yen strengthened as the Bank of Japan started a two-day meeting, while crude rose in New York. European stocks extended gains to a one-month high as investors awaited minutes from the Federal Reserve meeting last month.
The yen rose 0.6 percent to 100.59 per dollar, and added 0.5 percent to 128.65 per euro by 8:37 a.m. London time. West Texas Intermediate oil gained 1.2 percent, sending the Standard & Poor’s GSCI Index of 24 raw materials to a three-month high. The Stoxx Europe 600 Index advanced 0.3 percent, while S&P 500 Index (SPX) futures added 0.1 percent after the gauge closed within 1 percent of a record high yesterday.
The BOJ will leave its bond-buying program unchanged, according to all 20 economists in a Bloomberg News survey. Minutes of the Federal Open Market Committee’s June 18-19 meeting will be released today and Fed Chairman Ben S. Bernanke will speak at a National Bureau of Economic Research conference. Asian stocks pared gains after China’s exports and imports unexpectedly contracted in June.
“Fed tapering is a big theme that’s going to dominate volatility and returns over the coming weeks and months,” Bruno Del Ama, chief executive officer of Global X Funds, a New York-based exchange-traded fund company, said in a Bloomberg Television interview. “The markets are going to be very focused with regards to the speed of the tapering as well as when it will start.”
French Output
The Stoxx Europe 600 Index rose to its highest level since June. Industrial production in France probably fell 0.8 percent in May from the previous month, when it increased 2.2 percent, according to the median estimate of economists surveyed by Bloomberg News before the data today.
S&P 500 futures signaled the gauge may extend a four-day winning streak. The measure climbed 0.7 percent yesterday after Alcoa Inc. started the U.S. earnings season with results that beat analysts’ estimates. Yum! Brands Inc. reports earnings today, while JPMorgan Chase & Co. and Wells Fargo & Co. are among companies releasing results this week.
The U.S. benchmark has recovered all its losses following a 4.8 percent drop between June 19 and 24, triggered when Bernanke said central bank may reduce its $85 billion of monthly bond-buying this year and end the program in 2014 as economic risks subside. The S&P 500 is still down 1 percent from its last record on May 21, the day before Bernanke told Congress the Fed could taper purchases.
China Trade
About five stocks rose for every four that fell on the MSCI’s Asian gauge, which advanced 0.7 percent today, paring gains of as much as 0.8 percent. Shares in Hong Kong and Indonesia gained more than 1 percent.
The Shanghai Composite Index jumped 2.2 percent, gaining the most in almost four months, on speculation the government will take measures to support economic growth. There’s some speculation about a cut in the reserve-requirement ratio, said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management Co., which manages $120 million.
Data today showed China’s exports fell 3.1 percent in June from a year earlier, compared with the median estimate of a 3.7 percent gain in a Bloomberg News survey. Imports declined 0.7 percent after a 0.3 percent drop in May. China’s economy probably expanded 7.5 percent in the three months ended June 30, according to the median estimate in a Bloomberg News survey before data due July 15. That’s down from 7.7 percent in the first quarter and 7.9 percent in the last three months of 2012.
Japan Recovery
Japan’s Topix declined from a seven-week high as the yen strengthened against all its 16 major peers. Thirteen of 20 economists in a Bloomberg News survey completed July 8 saw no extra loosening by the BOJ in the next six months, a reversal from a poll in May.
BOJ Governor Haruhiko Kuroda and his fellow policy makers will discuss upgrading their assessment of the nation’s economy by using the word “recover” for the first time in more than two years, according to people familiar with the central bank’s discussions.
The Dollar Index lost 0.2 percent to 84.42 after yesterday reaching 84.753, the highest level since July 2010. Australia’s dollar rose to its highest level in a week on speculation its recent decline was excessive, rallying from a loss that had been fueled by concern that trade is slowing with China.
West Texas Intermediate oil climbed to $104.85 a barrel, helping drive the S&P GSCI Index of 24 commodities up 0.6 percent. Crude inventories fell by 9 million barrels last week, said a person with knowledge of data from the American Petroleum Institute industry group. A government report today may show that supplies dropped by 3.2 million barrels, according to a Bloomberg News survey.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
