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The Stoxx Europe 600 Index climbed 0.6 percent by 8:10 a.m. in London, extending a seven-year high, as rates on 10-year notes of Germany, Italy, Spain and France fell to all-time lows. Standard & Poor’s 500 Index futures were little changed. The MSCI Asia Pacific Index climbed 0.9 percent. Japan’s 10-year yield dropped the most since April 2013. Brent crude advanced
2.3 percent, paring its drop since Jan. 16 to 1 percent. The euro bought $1.1351.
The ECB will buy up to 60 billion euros ($68 billion) of assets a month through September 2016, President Mario Draghi said Jan. 22. Prince Salman, named as Abdullah’s successor, will probably continue his predecessor’s policy of maintaining oil production to preserve the country’s 20 percent share of global crude sales. The so-called flash China purchasing managers’ index from HSBC Holdings Plc and Markit Economics unexpectedly rose to 49.8 from 49.6 in December, where readings above 50 denote expansion.
“The program the ECB announced yesterday is relatively large in terms of types of assets and also the maturities to be purchased,” said Patrick Jacq, a senior fixed-income strategist at BNP Paribas SA in Paris. “This is clearly supportive for all euro-area government bonds.”
Global Rally
The Stoxx 600 surged 1.7 percent to extend a seven-year high on Jan. 22. The gauge is heading for its biggest two-week rally since December 2011, according to data compiled by Bloomberg. The ECB pledged to buy government bonds as part of an asset-purchase program worth around 1.1 trillion euros. In addition to monthly purchases, the ECB also reduced the cost of its long-term loans to banks.The euro weakened 0.1 percent today and touched $1.1316, equaling yesterday’s lowest level versus the dollar since September 2003.
Italy’s 10-year yield fell eight basis points, or 0.08 percentage point, to 1.47 percent as of 7:43 a.m. London time and touched 1.462 percent, the lowest level since Bloomberg began collecting the data in 1993. Spanish 10-year yields declined as much as 10 basis points to a record 1.302 percent.
German bunds due in a decade paid as little as 0.417 percent, and the nation’s two-year rate touched minus 0.183 percent, also an all-time low. The rate on 10-year French notes slipped four basis points to 0.573 percent.
The 10-year Japanese government bond yield rose the most since May 2013 on Thursday and was down today by as much as nine basis points. Futures on the notes rose by the most since 2010 today.
U.S., Asia
The S&P 500 rose 1.5 percent to 2,063.15 on Jan. 22, capping a fourth straight gain and erasing its loss for the year.The MSCI Asia Pacific Index rose to 141.02, heading for the highest close since Nov. 26. The S&P/ASX 200 Index (AS51) rose 1.5 percent in Sydney while New Zealand’s main share index closed at a record. The Kospi index in Seoul was 0.8 percent higher and Japan’s Topix index advanced 1 percent.
The Hang Seng Index increased 1.3 percent toward its highest closing level since Sept. 8. The Shanghai Composite Index rose 0.3 percent, close to erasing what would be its first weekly decline since Nov. 7. The gauge’s 10-week rising streak through Jan. 16 was the longest since 2007.
The HSBC preliminary PMI result exceeded the median estimate of 49.5 in a Bloomberg survey of economists. Along with data this week showing industrial output and retail sales improved in December, the first reading of the economy’s momentum in January may alleviate concerns of a deeper downturn.
Saudi Succession
West Texas Intermediate crude for March delivery traded 2.1 percent higher at $47.29 a barrel after slipping 3.1 percent on Jan. 22. The contract is down 2.9 percent this week after capping its first weekly gain since Nov. 21 on Jan. 16. Brent for March settlement was at $49.62 a barrel after falling 1 percent to end Jan. 22 at $48.52 a barrel.The Saudi king, who was born in 1924, died at 1 a.m. local time, the press agency said. Prince Muqrin has been named Crown Prince. A key indicator on crude production will be whether Salman, 79, retains the oil minister, Ali al-Naimi, who has driven decision-making since 1995.
“The Saudi leadership has already taken the tough decision to live with lower oil prices,” Florence Eid-Oakden, chief economist at London-based consultants Arabia Monitor, said by phone. “Naimi is well established, he is respected and there shouldn’t be a change as long as the current cabinet is in place.”
Supply Glut
Depressing prices yesterday was a report showing that U.S. crude supplies surged the most since 2001 last week, exacerbating a glut that’s slashed more than 55 percent from benchmark prices since June and complicated central bank efforts to spur inflation.The Bloomberg Dollar Index was little changed after a 10-year closing high on Jan. 22. The gauge is up 1.5 percent for the week, its biggest such advance since June 2013.
The ECB’s shift exacerbates an emerging global divergence in monetary policy. While the Fed is now considering when to tighten credit, central banks in Denmark, Turkey, India, Canada and Peru all announced surprise rate cuts in the past week. The Danish central bank cut its certificate of deposit rate to minus 0.35 percent, the second reduction this week. The Swiss National Bank shocked investors by dropping a cap on the franc.
China’s yuan weakened to 6.2258 per dollar in onshore trade, and touched the lowest level since Dec. 30. The People’s Bank of China cut its daily fixing by 0.16 percent to 6.1342 a dollar, the weakest level since Dec. 5.
(The headline on a previous version of this story was corrected to remove an erroneous reference to the euro.)
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