BLBG:Yen Gains as Metals Fall, Europe Shares Pare Advance
The yen strengthened as the biggest jump in consumer prices since 2008 damped speculation Japan will need to expand stimulus. Metals led commodities lower as China cut manufacturing capacity while European stocks erased gains.
Japan’s currency appreciated 0.6 percent to 98.68 per dollar at 10:48 a.m. in London, bringing this week’s advance to 2 percent. The Standard & Poor’s GSCI (SPGSCI) gauge of 24 raw materials slipped 0.3 percent, with copper down 0.9 percent and West Texas Intermediate oil heading for the biggest weekly drop in a month. The Stoxx Europe 600 Index slipped less than 0.1 percent and S&P 500 Index (SPX) futures lost 0.3 percent. Italian bonds dropped for a fourth day.
Consumer prices in Japan excluding food rose 0.4 percent in June, more than economists estimated, as Prime Minister Shinzo Abe’s policies weaken the yen and energy costs rise. China directed more than 1,400 companies in industries from steelmaking to papermaking to cut excess capacity by year-end. LVMH Moet Hennessy Louis Vuitton SA (MC), the world’s largest luxury-goods maker, and Kering SA, owner of the Gucci brand, advanced after reporting accelerating sales growth.
“We had the inflation data in Japan which was a bit higher than expected and that’s reducing expectations of further monetary easing and giving a lift to the yen,” said Niels Christensen, chief currency strategist at Nordea Bank AB in Copenhagen.
Draghi Speech
The yen rose against all of its 16 major counterparts, advancing 0.6 percent to 131.03 per euro. Japan’s Topix index tumbled 2.9 percent. The dollar was little changed at $1.3294 per euro, for a decline of 1.1 percent this week.
The Stoxx 600 has climbed 17 percent since European Central Bank President Mario Draghi said at a speech in London a year ago today the policy makers will do whatever is needed to preserve the euro. Spanish 10-year yields have dropped from a euro-era record 7.75 percent the day before Draghi’s speech. Italian 10-year rates dropped more than 2 percentage points in the same period, from 6.71 percent.
“We are one year on from ‘whatever it takes,’” Kit Juckes, a global strategist at Societe Generale SA in London, wrote in e-mailed comments. “The euro has held together, no one has left, spreads are tighter, PMI is back up, the sun is shining and even the Spanish unemployment rate has fallen.”
LVMH Sales
The Stoxx 600 is little changed this week after four straight weeks of gains. LVMH climbed 4.2 percent and Kering advanced 4.1 percent in Paris. Deutsche Boerse AG slipped 2.5 percent as the operator of the Frankfurt stock exchange reported declining profit.
The S&P 500 has slipped 0.1 percent so far this week, following fopur straight weeks of gains. Starbucks Corp. rallied 5.8 percent in German trading as fiscal third-quarter net income beat estimates.
Ten companies in the S&P 500 are due to release results today, including Stanley Black & Decker Inc. Of companies to have reported to far this period, 73 percent have beaten analysts’ profit estimates, and 57 percent have topped sales forecasts, according to data compiled by Bloomberg.
A report at 9:55 a.m. New York time may show U.S. consumer confidence was little changed this month. The Thomson Reuters/University of Michigan final index of consumer sentiment dropped to 84 from 84.1 in June, according to the median estimate of 63 economists surveyed by Bloomberg. The initial reading for the measure was 83.9.
Emerging Markets
The MSCI Emerging Markets Index rose 0.2 percent, extending its third consecutive weekly advance. The Shanghai Composite slipped 0.5 percent. Russia’s Micex Index added 0.3 percent, rebounding from a two-week low.
Samsung Electronics Co. (005930) lost 0.9 percent in Seoul after posting net income of 7.58 trillion won ($6.8 billion) for last quarter, versus an average analyst estimate of 8.02 trillion won.
The S&P GSCI fell for a third day and is down 1.8 percent this week, heading for the first weekly decline since June 21. WTI slid 0.7 percent to $104.76 a barrel, bringing the decline this week to 3 percent, also the most in five weeks. Brent traded in London at a premium to WTI of about $2.50 a barrel. The European benchmark crude fell below the U.S. oil in intraday trading on July 19 for the first time since August 2010. Copper sank to $6,969.50 a metric ton, the second drop in a row.
Italy’s 10-year bond yield climbed three basis points to 4.42 percent, leaving it little changed on the week. German 10-year bund yields declined two basis points to 1.66 percent.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jae Hur in Tokyo at jhur1@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
