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Friday, 17 August 2012
Stocks, Spanish Bonds Gain As Oil Slides; Platinum Jumps
By Stephen Kirkland and Jason Clenfield - Aug 17, 2012 1:36 PM GMT+0400
Stocks gained in Europe to a five- month high and the euro strengthened as Spain’s 10-year bond yield fell to the lowest level in six weeks. Platinum rose after violence escalated at a South African mine, while Brent crude snapped a four-day rally.
The Stoxx Europe 600 Index added 0.3 percent at 10:30 a.m. in London, headed for an 11th week of gains. Standard and Poor’s 500 Index futures fell less than 0.1 percent after the gauge closed yesterday at a four-month high. The euro appreciated 0.2 percent to $1.2376. Spain’s 10-year bond yield fell seven basis points to 6.45 percent, the lowest since July 5. Platinum increased 0.6 percent and Brent crude fell 1 percent.
Building permits rose to the highest since August 2008, a month before the bankruptcy of Lehman Brothers Holdings Inc., signaling stabilization in the housing market that triggered the financial crisis. Photographer: Daniel Acker/Bloomberg
Aug. 17 (Bloomberg) -- Steven Major, head of fixed-income research at HSBC Holdings Plc, discusses Spanish bond yields, German bunds and investment strategy. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse." (Source: Bloomberg)
An index of leading economic indicators in the U.S. probably rebounded in July, economists said before a Conference Board report today, following data this week that showed retail sales jumped more than expected and applications for buildingpermits rose to the highest since August 2008. GermanChancellor Angela Merkel said yesterday in Ottawa theEuropean Central Bank’s insistence on conditionality in return for helping cut borrowing costs for indebted governments matches her priorities.
“The U.S. economic deterioration is being curtailed,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. “Euro-region officials are going along with the ECB, reducing uncertainty. There’s less anxiety out there so we should see investors continuing to buy.”
The Stoxx 600 (SXXP) has climbed 0.8 percent this week, headed for its longest winning streak since January 2006. Bankinter SA and Bankia SA rallied more than 4 percent on speculation the European Union will disburse the first instalment of a 100 billion-euro ($124 billion) bailout facility to Spain’s lenders. Swiss Life Holding AG (SLHN) jumped 3.5 percent as the biggest Swiss life insurer’s first-half profit exceeded analysts’ estimates.
Lonmin Plc (LMI) slumped 6.6 percent and traded down as much as 8.6 percent to the lowest since 2008 after 35 people were killed at its Marikana platinum mine in South Africa. Platinum jumped as much as 0.8 percent to $1,453 an ounce, the highest since July 6. Lonmin is the third-biggest producer of the metal.
U.S. index futures were little changed after a two-day advance in the S&P 500. The Conference Board’s gauge of leading economic indicators probably rose 0.2 percent in July after falling 0.3 percent the previous month, based on the median of 46 estimates in a Bloomberg survey of economists. Another report may show Thomson Reuters/University of Michigan preliminary index of consumer sentiment slipped to 72.2 in August from 72.3 the prior month, according to a Bloomberg survey.
Facebook Inc. (FB) rose 0.8 percent in German trading. The world’s largest social-networking company sank 6.3 percent in New York yesterday after it boosted the amount of shares available to trade following its May 17 initial public offering.
Spanish bonds outperformed all their euro-area peers. The 10-year yield has fallen 41 basis points this week, the biggest decline since the five days through July 27. Spain’s two-year yield dropped 24 basis points to 3.75 percent.
The two-year yield may fall to as low as 2 percent should the ECB buy debt through its bond-purchase program, said Steven Major, head of fixed-income research at HSBC Holdings Plc in London.
“It’s all about getting those front-end yields stapled to the floor,” Major said in an interview on Bloomberg Television’s “The Pulse” with Maryam Nemazee.
German 10-year yields were little changed at 1.53 percent. The rate on similar-maturity Treasury notes was at 1.82 percent, after reaching 1.86 percent yesterday, the highest since May 11, and matching the 200-day moving average.
Australia’s dollar declined against all of its major peers, weakening 0.7 percent versus the U.S. currency, after the nation’s Treasury said the central bank would be able to ease monetary policy if the currency’s gains are hurting the economy.
The S&P GSCI gauge of 24 commodities was down 0.3 percent, the first decline in four days. Brent oil fell to $114 a barrel and copper advanced 0.7 percent, the second consecutive gain.
The MSCI Emerging Markets Index (MXEF) fell 0.1 percent, heading for its first weekly drop in five weeks. South Korea’s Kospi Index lost 0.6 percent, with shares in South Africa, Poland Taiwan and Thailand declining. The Hang Seng China Enterprises Index of mainland companies added 0.9 percent, and Russia’s Micex Index and India’s Sensex both rose 0.2 percent.