European stocks rose for the first time in three days.
The Stoxx Europe 600 Index climbed 0.5 percent by 6:30 a.m. in New York. Standard & Poor’s 500 Index futures were little changed. The Shanghai Composite Index (SHCOMP) added 2.9 percent after a 5.4 percent slide yesterday. Greece’s ASE Index fell 1.6 percent and the yield on the government’s three-year notes jumped 119 basis points to 9.49 percent. The rand declined 0.5 percent to 11.5134 per dollar as the yen strengthened versus all but one of its 16 major peers. Crude oil retreated for the fourth time in five sessions in New York
The prospect of an election in Greece fueled speculation opponents of the European Union’s bailout terms may gain more power. Reports today showed China’s inflation missed estimates, fueling speculation authorities will boost stimulus after a
move to tighten short-term lending rules in the country sparked a rout in equities yesterday. Treasury 10-year notes are set to draw the lowest auction yield in 18 months as the outlook for slowing inflation and demand for haven assets drives investor
appetite for the securities. “Yesterday’s selloff was a bit overdone -- a good case of some selling panic hitting very low December volumes,” Michael Woischneck, who helps oversee the equivalent of $7.7 billion at Lampe Asset Management in Dusseldorf, Germany. “Investors
were
right to be concerned with the gamble of an early presidential
election. But although it’s important for Greece, it’s not a
game changer. Europe is steady enough to cope with whatever
comes out of Greece.” European Stocks
Sixteen of the 19 industry groups in the Stoxx 600 climbed, with the volume of the gauge’s shares changing hands 4.6 percent greater than the average for the past 30 days, data compiled by Bloomberg show.While most of the 18 western-European markets increased, Greece’s ASE fell for a second day, after losing 13 percent yesterday.
Ashtead Group Plc climbed 8.3 percent and TUI AG rose 1 percent after they reported earnings that beat analysts’ estimates.
Sika AG, the Swiss sealants and adhesives maker, fell for a third day, dropping 3.5 percent as its controlling shareholder pushed to change the board to prepare for a sale of its stake to Cie. de Saint-Gobain SA.
Futures (SPX) on the S&P 500 expiring this month were little changed with the index 0.8 percent away from a record. The MSCI All-Country World Index dropped 0.2 percent for a third day of losses.
China Volatility
The Shanghai Composite rallied as a 10-day measure of price swings jumped to the highest since September 2009. The gauge retreated from a 3 1/2-year high yesterday amid record turnover in China. Volatility in stocks has increased as investors assess the sustainability of a rally that topped every other market worldwide during the past month.The Hang Seng China Enterprises Index (HSCEI), which tracks mainland Chinese stocks listed in Hong Kong added 0.4 percent today after declining the most in three years yesterday.
Chinese producer prices slipped 2.7 percent in November from a year before, a 33rd straight decrease, while consumer inflation slowed to 1.4 percent, versus an estimate for 1.6 percent, reports today showed.
Deflation Risk
The rising risk of deflation increases pressure on the People’s Bank of China to follow up last month’s surprise interest-rate cut with further monetary easing, such as reducing banks reserve requirement ratios.“China has entered into a rapid dis-inflation process, and faces the risk of deflation,” said Liu Li-Gang, the chief Greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. “As the PBOC has exhausted its newly invented and ineffective policy tools, we believe the next move will have to be a reserve ratio requirement cut in order to regain policy effectiveness and credibility.”
Russia’s ruble slid 0.6 percent to 54.3525 per dollar while the Micex Index gained 1.6 percent.
The yield on the 10-year bond fell for the first time in 12 days, retreating 19 basis points to 12.78 percent after reaching a five-year high yesterday. Yields have climbed this month on bets the Bank of Russia will take steps to curb a depreciation that has wiped out almost 40 percent of the ruble’s value this year.
Russia Rates
Policy makers will probably increase the key rate to 10 percent from 9.5 percent when they meet tomorrow, according to the median estimate of 27 economists surveyed by Bloomberg.Credit-default swaps on Russia held within one basis point of a five-year high of 403 basis points, according to data compiled by CMA. The contracts were little changed after rising for 12 days through yesterday, the longest streak since November 2007. Swaps on Russia were the most actively traded in the world last week, according to the Depository Trust & Clearing Corp.
Greek securities extended losses into a third day, dragging down government bonds from the euro-area’s most-indebted nations and boosting demand for the safest fixed-income assets. The nation’s 10-year yield increased 60 basis points to 8.79 percent, the highest since Oct. 17.
Italy Bonds
Credit-default swaps insuring Greek debt were quoted at a 14-month high of 891 basis points, according to CMA.Italy’s 10-year yield rose five basis points to 2.09 percent. The rate on German bunds fell to a record 0.678 percent.
The cost of insuring European corporate debt rose to the highest in three weeks, with the Markit iTraxx Europe Index of credit-default swaps on investment-grade companies up two basis points at 60 basis points, data compiled by Bloomberg show.
U.S. Treasuries are also gaining from the haven demand. The bid-to-cover ratio at a sale of three-year notes yesterday, which gauges demand by comparing total bids with the amount of securities offered, was 3.24, compared with 3.18 last month.
The 10-year notes being offered today yielded 2.22 percent in pre-auction trading, which would be the lowest level at the monthly sales since June 2013.
The yen strengthened, heading for its biggest three-day gain versus the dollar since April. It jumped 0.4 percent to 119.18 per dollar, extending its three-day gain to 1.9 percent, the most since the period ended April 8. Japan’s currency rose 0.4 percent to 147.58 per euro. The dollar traded at $1.2381 per euro.
West Texas Intermediate crude slid 1.6 percent to $62.80 a barrel in New York, erasing yesterday’s 1.2 percent gain. Brent crude slipped 1.4 percent to $65.90 in London trading.
Copper led industrial metals lower, declining 0.5 percent to $6,447 a metric ton on the London Metal Exchange. Wheat fell 0.6 percent on the Chicago Board of Trade, while soybeans gained 0.9 percent.
No comments:
Post a Comment