BLBG: U.S. Stock Futures Climb, Yen Pares Gain on Putin Speech
U.S. stock futures climbed with European shares while the yen pared gains after Russian President Vladimir Putin said he isn’t seeking to split up Ukraine. Gold fell before a Federal Reserve meeting.
The Standard & Poor’s 500 Index (INDEXCF) futures rose 0.3 percent at 8:52 a.m. in New York. The Stoxx Europe 600 Index advanced 0.5 percent. Russian shares rallied for a second day, adding 2 percent. The yield on 10-year Treasuries was little changed and the yen strengthened 0.2 percent after earlier advancing as much as 0.4 percent. Gold dropped 1.5 percent.
Russia wishes no harm to Ukraine, Putin told parliament in a speech today, after ordering the approval of Crimea’s accession to Russia. The Fed will press on with cuts to stimulus and switch to qualitative guidance for assessing rates, according to economists ahead of the central bank’s two-day meeting. German investor confidence declined for a third month in March, while U.S. housing starts were little changed in February.
“The words that market participants wanted to hear were that he’ll respect Ukraine’s sovereignty and will be satisfied with Crimea, and won’t go for more,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. These “words were heard, and we’re seeing a relief nudge up,” he said.
Putin supported a request from Ukraine’s separatist region of Crimea to join Russia, defying U.S. and European Union sanctions. Crimea voted on March 16 to leave Ukraine and become a part of Russia. The regional parliament called the plebiscite after Ukrainian President Viktor Yanukovych fled the country following protests against his rule.
“We don’t want to split up Ukraine, we don’t need that,” the Russian president said in a speech to parliament. “Don’t believe those who scare you with Russia, who yell that Crimea will be followed by other regions.”
Economic Data
S&P 500 futures expiring in June rose after the index climbed 1 percent yesterday, rebounding from its worst week since January. The index is near a record high reached March 7.
Housing starts in the U.S. were little changed in February after declining less than previously estimated a month earlier, data showed today, indicating the home-building industry is stabilizing after bad winter weather curbed construction.
The 0.2 percent decrease to 907,000 homes at an annualized rate last month followed a revised 909,000 pace in January, figures from the Commerce Department in Washington showed. The median estimate in a Bloomberg survey called for a 910,000 rate after a previously reported 880,000 in January.
The cost of living in the U.S. was little changed in February, showing inflation is making scant progress toward the Fed’s goal ahead of the policy makers’ meeting this week.
Fed Meeting
Fed officials have said they will probably hold the bank’s target interest rate near zero “well past the time” that unemployment falls below 6.5 percent, “especially if projected inflation” remains below its longer-run goal of 2 percent.
The Fed Open Market Committee will further scale back its stimulatory bond-buying program when its meeting concludes tomorrow, reducing purchases by $10 billion for the third time, according to 54 economists surveyed by Bloomberg March 14-17. Policy makers will scrap a 6.5 percent unemployment-rate target in favor of a range of economic indicators, 76 percent of the economists said.
European Shares
The Stoxx 600 jumped 1.1 percent yesterday following its biggest weekly loss since January.
Scania AB (SCVB), a Swedish truckmaker, declined 3.7 percent after a board committee recommended rejecting Volkswagen AG’s takeover offer. Cairn Energy Plc lost 12 percent after the U.K. oil explorer said it is suspending a buyback program. Kuoni Reisen Holding AG advanced 6.9 percent after Switzerland’s biggest travel company posted 2013 profit that exceeded estimates.
The MSCI AC Asia Pacific Index climbed 0.6 percent today, rebounding from a five-week low.
The yen advanced 0.2 percent to 101.59 per dollar after appreciating to 100.76 on Feb. 4, the strongest since Nov. 21. The dollar was little changed at $1.3916 per euro.
The Micex Index of shares rose 2 percent in Moscow. The gauge of Russian stocks has climbed 5.8 percent over two days.
The MSCI Emerging Markets Index rose for second day, increasing 0.4 percent.
Gold Falls
Gold dropped to $1,352.50 an ounce and U.K. natural gas declined for a second day, losing 0.6 percent to 57.80 pence a therm.
Dollar bonds sold by Chinese developers are tumbling after government officials said Zhejiang Xingrun Real Estate Co. doesn’t have enough cash to repay 3.5 billion yuan ($566 million) of debt. That news comes less than two weeks after Shanghai Chaori Solar Energy Science & Technology Co. became the first company in China to default on its onshore corporate bonds.
More than 65 percent of dollar securities sold by Chinese developers this year are trading below their issue price.
To contact the reporters on this story: Nick Gentle in Hong Kong at ngentle2@bloomberg.net; Claudia Carpenter in London at ccarpenter2@bloomberg.net
To contact the editors responsible for this story: Stuart Wallace at swallace6@bloomberg.net; Lynn Thomasson at lthomasson@bloomberg.net Jeff Sutherland
