Treasuries advanced after a report showed U.S. wholesale prices declined for a third month in November, while the yen rebounded from a five-year low versus the dollar. U.S. stock futures and European shares rose while gold and silver rebounded from yesterday’s declines. Ten-year Treasury yields fell two basis points to 2.85 percent at 8:56 a.m. in New York after climbing for two straight days. Japan’s currency strengthened 0.2 percent to 103.16 per dollar after reaching 103.92, the weakest level since October 2008. Standard & Poor’s 500 Index futures gained 0.2 percent after the gauge closed at a one-month low. The Stoxx Europe 600 Index rose 0.1 percent. Gold advanced 0.8 percent and U.S. natural gas dropped from a two-year high. Government data today showed U.S. producer prices decreased 0.1 percent in November from the previous month and were 0.7 percent higher than last year, trailing economists’ estimates. Stocks worldwide are heading for their biggest weekly decline since August as signs of improvement in the U.S. economy spurred concern the Fed will rein in stimulus at next week’s meeting. JPMorgan Chase & Co. predicted the S&P 500 will rally 17 by the end of next year. The yen is on pace to complete a seventh weekly decline as the yield advantage of Treasuries over Japanese debt approached the widest since April 2011. The currency retreated as much as 0.5 percent to 142.83 per euro, the weakest since October 2008. U.S. Treasuries The U.S. 10-year yield was down 1.6 basis points at at 2.86 percent, having risen 12 basis points this month. Its premium over similar-maturity Japanese bonds was 2.16 percentage points, near the 2 1/2-year high of 2.24 reached on Dec. 5. The Australian dollar headed for an eight straight weekly loss versus the U.S. currency, its longest slump since 1985, as Governor Glenn Stevens intensified his efforts to talk down the currency by signaling a weaker Aussie is preferable over lower interest rates to help spur the nation’s slowing economy. The Aussie touched a more-than-three month low of 89.63 U.S. cents. The Fed will probably start reducing its $85 billion of monthly bond purchases at next week’s meeting, according to 34 percent of economists surveyed Dec. 6 by Bloomberg, up from 17 percent in a Nov. 8 poll. A tapering of the Fed’s asset purchases would curb the supply of cheap dollar financing that has spurred demand for higher-yielding assets globally. Tapering Prospect “With the prospect of tapering only days to weeks away, the global effect is starting to ramp up,� said Evan Lucas, Melbourne-based market strategist at IG Ltd. “It will cause short-term vibrations.� S&P 500 futures expiring in March rose, signaling the index may increase after three days of declines. The gauge has lost 1.6 percent this week and is on pace for its biggest drop since August. Still, it has risen 24 percent this year and is heading for its biggest annual advance since 2003. Shares worldwide have fallen this week. The MSCI All Country World Index has lost 1.5 percent, and the MSCI Asia Pacific Index slipped 1.3 percent. The Stoxx 600 closed at a two-month low yesterday and has dropped 1.8 percent this week. European Movers AstraZeneca Plc gained 1.9 percent after a diabetes pill from the company and Bristol-Myers Squibb Co. won the backing of U.S. advisers. Sandvik AB climbed 2.8 percent after Deutsche Bank AG recommended buying the stock. RSA Insurance Group Plc (RSA) lost 17 percent after its chief executive officer resigned as an investigation into accounting practices at its Irish unit forced the insurer to increase reserves. PSA Peugeot Citroen slumped 9.3 percent as General Motors Co. said it is selling its entire stake in the French carmaker. Adobe, Anadarko In early U.S. trading, Adobe Systems Inc. jumped 6.3 percent as the company attracted more subscribers to its online software in the fourth quarter than some analysts had projected. Anadarko Petroleum Corp. tumbled 10 percent as a judge ruled it may have to pay as much as $14 billion in a case related to the spinoff of Tronox Inc. The S&P 500 may climb 17 percent to 2,075 by the end of next year as profit growth accelerates and U.S. monetary remains supportive, Thomas Lee, JPMorgan Chase & Co.’s chief U.S. equity strategist, wrote in a research report today. Large technology companies provide the most attractive opportunity for outperformance, he said. The MSCI Emerging Markets Index fell 1 percent this week with benchmark gauges in Thailand and India slumping. The SET Index in Bangkok dropped 1.1 percent today to its lowest level in more than three months. India’s S&P BSE Sensex Index fell 1 percent, taking its four-day retreat to 2.9 percent. Foreign investors appear to be selling more Thai equities on concern about a deadlock in domestic politics, said Athaporn Arayasantiparb, head of research at UOB Kay Hian Securities (Thailand) in Bangkok. Rupee, Rupiah India’s rupee fell for a third day, weakening 0.5 percent to 62.1250 per dollar, after data late yesterday showed industrial output shrank 1.8 percent in October and consumer-price inflation accelerated to 11.2 percent last month. The nation’s 10-year bond yield rose 6.4 basis points to 8.91 percent amid concern the central bank will raise interest rates at its Dec. 18 meeting. The yield on Ukraine’s June 2014 dollar notes dropped 289 basis points, or 2.89 percentage points, to 16.45 percent, as non-resident investors boosted their holdings of hryvnia sovereign debt. Thousands of protesters are demanding the government’s ouster and closer ties with the European Union. Gold climbed 0.5 percent to $1,232.04 in London. U.S. natural gas dropped 0.8 percent after closing yesterday at the highest price since July 2011 on forecasts for colder-than-normal weather. Soybeans fell 0.8 percent. The corporate bond market in Europe is heading for its quietest week since August, with 8.6 billion euros of new issues compared with 21.7 billion euros last week. Companies raised 776 billion euros this year, down from 827 billion euros in 2012. To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net; Cecile Vannucci in London at cvannucci1@bloomberg.net To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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