Greenback extends losses after depreciating 1.7% on Wednesday Metals advance as oil back above $32 burnishes sentiment Share on Facebook Share on Twitter Stocks rose around the world as a selloff in the dollar underpinned a resurgence in crude oil and metals. European shares advanced as surging mining and energy companies outweighed sliding automakers. Standard & Poor’s 500 Index futures climbed. U.S. oil extended gains above $32 a barrel as the Bloomberg Dollar Spot Index headed for its biggest two-day loss since 2009. The pound strengthened against the greenback as investors awaited the Bank of England’s latest interest-rate decision and economic forecasts. The dollar’s retreat was sparked by data showing the U.S. services sector grew at the slowest pace in nearly two years, underscoring the vulnerability of the American economy to unsteadiness abroad. The report tipped the fixed-income market’s balance closer toward zero rate hikes by the Federal Reserve this year, amid prospects central banks from Asia to Europe will act to quell the turmoil that’s roiled markets in 2016. The greenback’s drop helped boost the price of crude oil, along with speculation OPEC and other oil producing nations have agreed to an emergency meeting on market volatility. “We’ve seen commodities across the board in a swift move higher, with the common denominator the weaker dollar,� said Robin Bhar, a London-based analyst at Societe Generale SA. “Everything from gold to oil has benefited. Dwindling expectations of higher rates are affecting markets across the board. Clearly the Fed may struggle to raise rates more than once or twice this year.� Stocks The Stoxx Europe 600 Index rose 0.3 percent at 11:10 a.m. in London, after falling as much as 0.5 percent and rising 1.1 percent. Gauges of energy shares and commodity producers jumped more than 3.2 percent, for the best performances on the European index. Even Royal Dutch Shell Plc, which reported a slump in profit, gained 6.3 percent. Daimler AG led automakers to the biggest decline of the 19 industry groups on the European index. Shares slipped 3.8 percent after the maker of Mercedes-Benz cars said growth will slow down in 2016, predicting only “slight� gains in revenue and earnings following a record year. Credit Suisse Group AG slumped 11 percent to its lowest price since September 1992 after posting a quarterly loss as it wrote off goodwill and set aside provisions for litigation, while its two investment-banking divisions slumped. ING Groep NV soared 10 percent as quarterly profit beat estimates. Contracts on the Standard & Poor’s 500 Index added 0.2 percent after the gauge climbed 0.5 percent last session. Viacom Inc. surged 7.5 percent in early trading after a person familiar with the matter said the board will meet today to name a successor to Chairman Sumner Redstone. Following Wednesday’s disappointing data, investors will look to reports Thursday for indications of the health of the world’s biggest economy and the possible trajectory of interest rates. Initial jobless claims were little changed last week, while in December, factory orders declined at a faster pace and durable goods orders also contracted, according to economist forecasts. ConocoPhillips, Philip Morris International Inc. and Ralph Lauren Corp. are among S&P 500 members posting results Thursday. News Corp. reports earnings after the market close. Emerging Markets The MSCI Emerging Markets Index rose 2.4 percent, with more than five stocks advancing for every one that declined. Energy producers led gains among 10 industry groups, climbing more than 4.3 percent. Russia’s Micex Index jumped 2 percent, the most in a week, and shares in Dubai rallied 2.4 percent. Equity benchmarks in South Korea, Malaysia, the Philippines and South Africa rose at least 1.4 percent. The Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong gained for the first time this week, rising 1.5 percent. The Shanghai Composite Index also climbed 1.5 percent, with trading volumes 15 percent below the 30-day average before holidays next week. Currencies The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, retreated 0.6 percent after sliding as much as 1.9 percent last session. The pound extended its biggest jump since October before the BOE’s interest-rate decision and economic forecasts. “We don’t think the BOE is going to say anything to suggest they are inclined to be easing, and that the next move is still likely up,� said Richard Kelly, London-based global head of market strategy at Toronto Dominion Bank. “But nor do I expect them to suggest they are rushing to hike any time soon. Some of the extreme pricing in the market is probably going to recede slightly.� The pound was at $1.4653 as of 11:16 a.m. in London, after climbing 1.3 percent on Wednesday. It dropped to $1.4080 on Jan. 21, the lowest since 2009. The yen gained 0.3 percent to 117.55 per dollar following a 1.7 percent surge, while the euro traded at $1.1182. The won strengthened the most since October after falling every other day this week. The ringgit climbed 1.6 percent, buoyed by crude’s recovery given Malaysia is Asia’s only major net exporter of oil. A Bloomberg gauge of emerging-market currencies climbed 0.2 percent after rallying 1.2 percent on Wednesday. Commodities The Bloomberg Commodity Index, which measures returns on raw materials, extended the previous session’s advance as it rallied 0.4 percent. Oil held its rebound from the biggest drop in almost seven years. Futures were 0.8 percent higher in New York at $32.55 a barrel after earlier climbing as much as 2.1 percent. Statoil ASA, Norway’s biggest oil company, deepened investment cuts and offered to pay dividends in stock as a collapse in crude prices eroded earnings. The company said it plans to reduce capital expenditure to $13 billion this year from a revised $14.7 billion in 2015, after reporting a 63 percent drop in fourth-quarter profit on Thursday. Statoil boosted a target for 2016 cost savings to $2.5 billion from $1.7 billion. Spot gold climbed for a fifth day, the longest run of gains in five months, as expectations of continued low U.S. interest rates seeped through the market. The metal soared to the highest in three months at $1,147.47 an ounce. Investors increased holdings in exchange traded funds for a 13th time, the longest run in three years. Aluminum for delivery in three months climbed to the highest this year on the LME, reaching $1,543.50 a metric ton, and lead advanced for the eighth day in a row, the longest run since June 2014. Bonds Spanish government bonds led declines across the euro region as the nation joined France in auctioning a combined 12 billion euros ($13.4 billion) of debt. The yield on Spain’s 10-year bond rose seven basis points to 1.62 percent. France’s 10-year bond yields rose three basis points to 0.64 percent, while Germany’s increased four basis points to 0.31 percent. The Treasury 10-year note yield was little changed at 1.89 percent. The yield dropped to 1.79 percent Wednesday, the lowest level since February 2015. The cost of insuring corporate debt was little changed. The Markit iTraxx Europe Index of credit-default swaps on investment-grade companies held at 103 basis points, the highest since September 2013 on a closing basis. The non-investment grade Markit iTraxx Europe Crossover Index was around 396 basis points.

Source