BLBG:Indonesian Rupiah Drops as Euro Gains With New York Crude
Indonesia’s currency dropped to the weakest level since March 2009 after a dollar-bond sale fell short of its target. European stocks were little changed after two days of gains as the euro rose and oil advanced in New York.
The rupiah slid 0.5 percent to 11,793 per dollar as of 8:26 a.m. in London, prices from local banks show. The Stoxx Europe 600 Index swung between gains and losses while Standard & Poor’s 500 Index (SPX) futures added 0.1 percent. The euro advanced 0.4 percent to $1.3565 and West Texas Intermediate crude rallied 0.4 percent to $94.47 a barrel in New York.
U.S. and Italian data is forecast to show rising consumer confidence after a gauge of pending home sales in the world’s largest economy fell unexpectedly. A separate report today is expected to show U.S. house prices rose. Concern the country’s Federal Reserve will reduce economic stimulus weighed on demand for Indonesia’s domestic dollar debt with less than half the bonds offered being sold.
“We expect to see the rupiah weakening, keeping in view the Fed-tapering risk,” said Andy Ji, a currency strategist at Commonwealth Bank of Australia in Singapore. “There’s been damage to confidence recently, so the government may look to do another sale of the bonds when conditions stabilize.”
The government raised $190 million yesterday by selling dollar-denominated bonds to local investors, who submitted $294 million of bids, short of the $450 million goal, said Robert Pakpahan, the director general at the debt management office. The Jakarta Composite Index led declines in Asian markets, sliding 1.3 percent to the lowest level since September.
Stock Valuations
The MSCI Asia Pacific Index was little changed after two days of gains. Valuations on the gauge yesterday climbed to 13.9 times estimated earnings, close to the multiple of 14 reached on Nov. 18, the highest level since May, according to data compiled by Bloomberg.
Honda Motor Co. slid 2 percent today and Toyota Motor Corp. fell 1.2 percent as the yen strengthened, weakening earnings prospects for Japanese carmakers.
The currency appreciated 0.2 percent to 101.44 per dollar after slipping 0.4 percent against the greenback yesterday as some Bank of Japan officials said they saw risks to the outlook for the economy. Minutes of the BOJ’s October meeting published today showed one member said it was “highly uncertain” whether inflation would rise toward the 2 percent target.
“The market is ready for a technical pullback and we’ve taken some money off the table,” Angus Gluskie, who helps oversee about $550 million as a fund manager in Sydney at White Funds Management Ltd., said by phone. “We are now cautious.”
Aussie Rally
The Aussie rose for the first time in five days against the dollar after slumping almost 3 percent over the past four days. Businesses need to boost efficiency to maintain growth in living standards, Reserve Bank of Australia Deputy Governor Philip Lowe said in a speech in Sydney. RBA Governor Glenn Stevens said last week he was “open-minded” on currency intervention.
Stocks in Hong Kong and Shanghai swung between gains and losses. China Petroleum & Chemical Corp., known as Sinopec, fell 2.7 percent after the government detained seven personnel for their role in a deadly pipeline explosion.
China’s benchmark money-market rate fell to the lowest in more than a week as the central bank added 32 billion yuan ($5.3 billion) to the financial system using reverse-repurchase agreements. The People’s Bank of China should loosen monetary policy “slightly” to ease “relatively weak” liquidity, according to a front-page commentary in China Securities Journal.
Gold Rebound
Gold rebounded from a four-month low to the highest level in almost a week. Bullion for immediate delivery rose as much as 0.6 percent to $1,258.30 an ounce.
The Federal Housing Finance Agency’s house price index is projected to rise 0.4 percent for September after gaining 0.3 percent the previous month, while a consumer confidence gauge will probably come in at 72.6 for November from 71.2 the month earlier, according to Bloomberg surveys before data due today. The Richmond Federal Reserve’s factory measure may show a reading of 4 for November, up from 1 in October, according to the median of 10 estimates.
WTI crude rose after sinking as much as 1.9 percent yesterday. The declines were a knee-jerk reaction to an agreement with Iran over its nuclear program and probably won’t be sustained, analysts from Societe Generale SA to Barclays Plc said. Iran agreed Nov. 24 to curtail nuclear activities in return for the easing of some sanctions on oil, auto parts, gold and precious metals, an accord that broke a decade-long diplomatic deadlock.
U.S. crude stockpiles probably fell 300,000 barrels in the week to Nov. 22, the first time in 10 weeks, according to a Bloomberg survey of energy analysts.
“The selloff yesterday was a little bit overdone and that’s why we saw the bounce back,” Jonathan Barratt, the chief executive officer of Barratt’s Bulletin in Sydney who predicts investors may sell WTI contracts at about $95.50 a barrel, said by phone. “Demand is slowly starting to occur but there’s still a long way to go.”
To contact the reporters on this story: Rachel Evans in Hong Kong at revans43@bloomberg.net; Yudith Ho in Jakarta at yho35@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
