Energy companies lead gains in Europe, Asia on OPEC deal Oil near $47 after OPEC agrees first output cut in 8 years Share on Facebook Share on Twitter Bonds fell, while the dollar rose as data added to evidence the world’s largest economy continued to strengthen and policy makers signaled they’re moving closer to raising rates. Oil gained. Treasuries declined for a second day, the greenback climbed against most of its major peers and the S&P 500 Index halted a two-day advance. Sovereign bonds also retreated amid speculation that higher energy prices will revive inflation after OPEC’s surprise announcement of a deal to cut crude output spurred a surge in oil late Wednesday. Crude traded near $47 a barrel. India’s assets tumbled after the nation attacked terrorist targets in Pakistan. Traders have been sifting through economic reports to gauge the odds of a Federal Reserve hike. U.S. gross domestic product expanded more in the second quarter than previously estimated and the number of applications to collect jobless benefits rose less than forecast last week. Meanwhile, Fed Bank of Atlanta President Dennis Lockhart said the central bank is nearing its goals of maximum employment and steady inflation near 2 percent, leaving the economy primed for a rate increase. His Philadelphia counterpart Patrick Harker said policy makers should begin raising borrowing costs. While Fed officials including Fed Chair Janet Yellen have signaled that the case for tighter policy has strengthened, the Federal Open Market Committee decided against raising the benchmark rate on Sept. 21 for a sixth straight meeting. Economic data has taken a turn for the worse this month, with a Bloomberg gauge showing the biggest underperformance relative to economist estimates since June. Yellen speaks again Thursday. There’s a 54 percent probability the Fed will raise rates this year, according to data compiled by Bloomberg based on futures. The odds fell below 50 percent on Tuesday for the first time since Sept. 15. The calculation is based on the assumption the Fed’s target trades at the middle of the new band after the central bank’s next boost. Bonds The U.S. 10-year note yield climbed two basis points, or 0.02 percentage point, to 1.59 percent as of 9:40 a.m. in New York, according to Bloomberg Bond Trader data. Bond market measures for the inflation outlook climbed from the U.S. to the U.K. following OPEC’s decision. The 10-year break-even rate in the U.K., a measure of inflation expectations derived from the difference in yield between conventional gilts and index-linked securities, was set for its highest close since July last year. A similar measure in the U.S. approached its highest level since June. Merrill Lynch’s Option Volatility Estimate Index, a measure of expected price swings in Treasuries known by the acronym MOVE, fell to 57.6 Wednesday, the lowest closing level since December 2014. Currencies The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, rose 0.2 percent, after declining 0.4 percent over the previous three days. The yen dropped for a third day against the dollar amid optimism higher oil prices would help Bank of Japan Governor Haruhiko Kuroda achieve his inflation goals. Meanwhile, Colombia’s peso jumped on speculation for higher crude revenues. South Africa’s rand led losses among the world’s major currencies on speculation inflows arising from Anheuser-Busch InBev SA’s purchase of SABMiller Plc may have run their course. Mexico’s peso retreated from near a two-week high before a monetary policy review on Thursday, with most economists predicting interest rates will be raised. Stocks The S&P 500 Index fell 0.1 percent to 2,169.36, after rallying with oil yesterday. European energy producers and miners rallied, with Royal Dutch Shell Plc and Total SA heading for their biggest surges since February, while BP Plc added 4.2 percent. Those gains helped push the benchmark Stoxx Europe 600 Index up 0.6 percent. Lenders took their rebound into a second day, with Deutsche Bank AG up 0.9 percent. Commerzbank AG bucked the trend, falling 1.3 percent after announcing plans to cut 9,600 jobs and suspend dividends as Chief Executive Officer Martin Zielke seeks to shore up the German lender’s profitability. The MSCI Emerging Markets Index advanced for a third day, rising 0.4 percent, with benchmarks in South Africa, Hungary and the Philippines rallying at least 1.7 percent. India’s S&P BSE Sensex slid 1.6 percent and the rupee weakened 0.6 percent. Heavy casualties were inflicted on militants assembled to infiltrate India, Director General of Military Operations Ranbir Singh said in a briefing in New Delhi on Thursday. The operations have ended and no more are planned, he said, without elaborating. Pakistan’s army rebuffed India’s announcement, calling the claim of surgical strikes an “illusion.� Commodities West Texas Intermediate for November delivery rose 0.2 percent on the New York Mercantile Exchange after surging more than 5 percent yesterday. While Goldman Sachs Group Inc. sees the OPEC deal adding as much as $10 a barrel to oil prices, the bank remains skeptical about the implementation of quotas, even if they’re ratified when the group next meets on Nov. 30. History suggests OPEC’s ability to execute its agreements is poor, according to Morgan Stanley. "The devil is in the detail: they still need to come up with those individual country quotas,� Amrita Sen, chief oil analyst at consulting firm Energy Aspects Ltd. in London, said in a Bloomberg Radio interview. However, the deal is “very positive given the fact that this is the first time in eight years that they’ve actually come up with an agreement." Lead climbed to the highest level in more than a year as industrial metals advanced on speculation that OPEC’s decision to cut output will drive up oil prices. Gold was little changed, while copper advanced.

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