Friday, 23 November 2012

Euro Rises to Three-Week High as Europe Stocks Erase Drop

By Stephen Kirkland and Richard Frost - Nov 23, 2012 2:32 PM GMT+0400

The euro strengthened to a three- week high and stocks erased declines after a report showed German business confidence unexpectedly rose in November. Taiwanese shares climbed the most in 11 months.
The euro advanced 0.1 percent to $1.2897 at 10:30 a.m. in London after touching $1.2911. TheStoxx Europe 600 Index (SXXP) increased less than 0.1 percent, heading for its biggest weekly gain in more than nine months. Standard & Poor’s 500 Index futures rose 0.1 percent from Nov. 21 as markets were closed yesterday for the Thanksgiving holiday. The 10-year Treasury yield fell one basis point to 1.67 percent. The Taiex index jumped 3.1 percent after a report cited the finance minister saying state-controlled funds should buy stocks.
Euro Trades Near Three-Week High The euro rose 0.1 percent to 1.2896 per dollar at 7:10 a.m. in London. Photographer: Kiyoshi Ota/Bloomberg
Two Meetings, One Week, and Still No Deal in EuropeDivisions between rich and poor countries flared over the European Union’s next seven-year budget, leading German Chancellor Angela Merkel to rule out an accord until the new year.
The Munich-based Ifo institute said its business climate index climbed to 101.4 this month, compared with an estimated reading of 99.5 based on the median of 48 forecasts in a Bloomberg survey. Stocks have rallied this week as data from the U.S. and China added to signs the world’s two largest economies are recovering. Euro-area finance ministers will meet Nov. 26 to discuss Greek aid after leaders failed to agree the bloc’s next seven-year budget at a summit in Brussels.
The improvement in the Ifo data “is quite a positive sign,” Evelyn Herrmann, European economist at BNP Paribas SA in London, wrote in a note. “Better-than-expected surveys from China and the U.S. might have convinced German industrials that they will sooner or later benefit from the manufacturing sector recovery outside the eurozone, thereby at least offsetting the drag that they have from continued contraction” in the euro area, Herrmann said.

Euro Gains

The euro gained against 12 of its 16 main counterparts. The yen strengthened against all of its major peers, advancing 0.3 percent against the dollar.
Spain’s 10-year bond yield rose three basis points to 5.69 percent. Greek 10-year bonds fell for the first time in 11 days, pushing the yield 13 basis points higher to 16.49 percent.
“Overall market activity is subdued following the holiday in the U.S. and as investors wait for a solution to Greece’s debt problem,” Monthol Junchaya, chief investment officer at Bangkok-based One Asset Management Ltd., which manages about $2.3 billion of assets, said by phone today.
Three shares rose for every two that declined in the Stoxx 600, which has climbed 3.4 percent this week. The number of shares changing hands in Stoxx 600 companies was 21 percent lower than the 30-day average today, according to data compiled by Bloomberg.

Utilities Fall

EON AG and Veolia Environnement SA led losses among utilities. Outotec Oyj (OTE1V), a Finnish supplier of mining technology and services, rallied 7.2 percent after forecasting improved sales and profit margins in 2013.
Oil fell 0.4 percent to $87.06 a barrel in New York from the close on Nov. 21. Gold for immediate delivery rose 0.3 percent to $1,734.17 an ounce in London, advancing for a third day. The precious metal is set for a 1.1 percent gain this week after central banks boosted reserves and holdings in exchange- traded products climbed to a record.
The MSCI Emerging Markets Index (MXEF) gained 0.6 percent, advancing for a fifth day. The trading volume on Taiwan’s benchmark equity gauge was 73 percent higher than the 30-day average, according to data compiled by Bloomberg. The Shanghai Composite Index (SHCOMP)added 0.6 percent and Russia’s Micex Index advanced 0.2 percent.
To contact the reporters on this story: Stephen Kirkland in London at; Richard Frost in Hong Kong at;
To contact the editor responsible for this story: Stuart Wallace at