Stocks, Commodities Rise on Stimulus Bets; Dollar Rallies - Bloomberg
Stocks rose and commodities climbed for a second day on speculation central banks will take steps to boost economies as Europe's debt crisis saps growth. Spanish, Italian, U.K. and U.S. bonds advanced.
The MSCI All-Country World Index (MXWD) added 0.4 percent at 9:40 a.m. in London, heading for a second weekly gain. Standard & Poor's 500 Index futures increased 0.4 percent. The S&P GSCI Index of 24 raw materials jumped 0.6 percent, led by an 0.8 percent advance in crude oil. The yield on the Spanish 10-year bond dropped 10 basis points to 6.82 percent, with the similar- maturity Treasury yield falling three basis points. The pound weakened 0.4 percent, while the yen strengthened against all 16 of its major peers.
Policy makers from the U.K. to Japan and Canada stepped up warnings about the threat to world financial markets should Europe fail to contain its debt crisis. Greek elections June 17 may determine whether the country upholds austerity measures attached to international aid and remains in the euro bloc. U.S. industrial output probably slowed and consumer confidence fell, economists said before reports today.
"Traders are increasingly confident that major central banks and governments have contingency plans in place to counteract any possible market turmoil," Markus Huber, head of German sales trading at ETX Capital in London, said in an e- mailed note.
The Stoxx Europe 600 Index climbed 0.5 percent, snapping a two-day decline, as a gauge of banks rebounded after the Bank of England said it will provide billions of pounds of emergency aid to U.K. lenders. Barclays Plc jumped 3.6 percent, Lloyds Banking Group Plc added 4.2 percent and Royal Bank of Scotland Group Plc surged 6.3 percent. The central bank will allow the lenders to swap assets for money they can loan to companies and households.
Carrefour SA (CA) increased 1.6 percent as Europe's largest retailer agreed to sell a stake in its joint venture in Greece. Hennes & Mauritz AB (HMB) rose 1.7 percent after Europe's second- biggest clothing retailer posted quarterly sales that beat analysts' estimates. Telekom Austria AG gained 1.9 percent after America Movil SAB agreed to buy a 21 percent stake.
The increase in U.S. futures indicated the S&P 500 will extend yesterday's 1.1 percent advance. The 30-year Treasury yield declined three basis points.
A gauge of U.S. industrial production increased 0.1 percent in May, according to the median estimate in a survey of 79 economists by Bloomberg News, compared with a gain of 1.1 percent in April. A separate report may show the Thomson Reuters/University of Michigan preliminary index of sentiment fell this month from the highest level since October 2007, economists said.
Italy Yields Fall
Italy's two-year note yield tumbled 14 basis points, with the 10-year yield 10 basis points lower. The similar-maturity U.K. gilt rate slid seven basis points after the Bank of England activated a facility to "respond to actual or prospective market-wide stress." Governor Mervyn King said yesterday that the case for more stimulus in the U.K. is growing.
The yield on the Greek bond due in February 2023 dropped 46 basis points to 28.10 percent, declining for the third day. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments dropped 2.5 basis points to 318.5, the lowest in a week.
Crude oil for July delivery added 63 cents to $84.54 a barrel in New York after the Organization of Petroleum Exporting Countries urged members to cut production that's in excess of quotas. Copper for delivery in three months rose 1 percent to $7,491.75 a metric ton. Gold futures appreciated 0.3 percent to $1,624.70 an ounce. Natural gas advanced 0.3 percent, extending 14 percent jump yesterday that was the most in almost three years.
The MSCI Emerging Markets Index (MXEF) rose 0.9 percent, poised for its biggest weekly advance in four months. The Hang Seng China Enterprises Index of mainland stocks jumped 2.4 percent. Benchmark gauges in Taiwan, Thailand and India gained more than 1 percent.
Vietnam's VN Index surged 1.8 percent after the nation's Deputy Prime Minister Nguyen Xuan Phuc said the government will accelerate spending and boost bank lending. South Korea's Kospi index fell 0.7 percent as Samsung Electronics Co. dropped after production lines at its display unit were temporarily halted yesterday.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
Bank of England Governor Mervyn King
Chris Ratcliffe/Bloomberg
Mervyn King, governor of the Bank of England.
Mervyn King, governor of the Bank of England. Photographer: Chris Ratcliffe/Bloomberg
June 15 (Bloomberg) -- Emil Wolter, head of Asian equities strategy at Macquarie Group in Singapore, talks about the outlook for this Sunday's Greek elections, Europe's debt crisis and its implications for Asian economies and financial markets. He speaks with Mia Saini on Bloomberg Television's "First Up." (Source: Bloomberg)