By Stephen Kirkland - Sep 29, 2011 7:43 PM GMT+0700
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The euro strengthened against most of its major peers. Photographer: Chris Ratcliffe/Bloomberg
Sept. 29 (Bloomberg) -- David Blanchflower, a professor at Dartmouth College and Bloomberg Television contributing editor, talks about German lawmakers' approval of expanding the euro-area rescue fund's firepower. Blanchflower, speaking with Deirdre Bolton, Erik Schatzker and Dominic Chu on Bloomberg Television's "InsideTrack," also discusses the results of a quarterly Bloomberg Global Poll of investors, analysts and traders. (Source: Bloomberg)
Sept. 29 (Bloomberg) -- German lawmakers approved an expansion of the euro-area rescue fund’s firepower, freeing the way for European officials to focus on what next steps may be needed to stem the debt crisis. Global investors in a Bloomberg survey found investors anticipate the crisis to lead to an economic slump. Deirdre Bolton, Erik Schatzker, Michael McKee and Dominic Chu report on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
Sept. 29 (Bloomberg) -- Brian Barish, the Denver-based president of Cambiar Investors LLC, talks about global financial markets, Europe's sovereign debt crisis, and his investment strategy. Barish speaks with John Dawson on Bloomberg Television's "First Up." (Source: Bloomberg)
Sept. 29 (Bloomberg) -- Paul Donovan, deputy head of global economics at UBS AG, discusses the European sovereign debt crisis and the outlook for Germany's vote today on the European Financial Stability Facility. Donovan speaks with Linzie Janis on Bloomberg Television's "First Look." (Source: Bloomberg)
U.S. stock-index futures rose and European shares rebounded after a report showed the American economy grew faster than earlier estimated and jobless claims declined. The euro strengthened and Greek bonds rallied as German lawmakers backed expansion of a European bailout fund.
Standard & Poor’s 500 Index futures jumped 1.4 percent at 8:40 a.m. in New York. The Stoxx Europe 600 Index rallied 0.9 percent. The euro appreciated 0.6 percent to $1.3625. The Greek two-year yield tumbled 157 basis points to 68.20 percent. Oil rose 1.5 percent to $82.40 a barrel, while copper slid 1.8 percent.
The U.S. economy grew at a 1.3 percent pace in the second quarter, and applications for jobless benefits dropped by 37,000 in the week ended Sept. 24 to 391,000, the fewest since April, according to government data. German Chancellor Angela Merkel gained support from lawmakers to expand the European Financial Stability Facility’s firepower, as the lower house of parliament passed the measure with 523 votes in favor and 85 against.
“Crucially, Merkel won the vote without relying on the opposition,” Geoffrey Yu, a currency strategist at UBS AG in London, wrote in a note to clients. “Fears had initially been voiced that dissent within the party would be high.”
Concern Greece will default is dragging global equities and commodities toward their biggest quarterly losses since 2008. About three-quarters of investors surveyed by Bloomberg say the euro-area economy will fall into recession in the next year and more than half predict China’s growth will slow to less than 5 percent a year by 2016.
AMD, BNP
The gain in S&P 500 futures indicated the U.S. equities gauge will climb for the fourth time in five days. Advanced Micro Devices Inc. (AMD) fell 10 percent in pre-market trading after the second-largest maker of processors for personal computers cut its forecasts for third-quarter sales and profits.
Three shares advanced for every two that declined in the Stoxx 600. BNP Paribas (BNP) SA and Commerzbank AG led a rally in banks, climbing more than 4 percent. Hennes & Mauritz AB advanced 5.1 percent as Europe’s second-largest clothing retailer reported earnings that beat analysts’ estimates. Rio Tinto Group led mining companies lower.
The 17-nation European currency rose 0.7 percent against the yen, while the Dollar Index, which tracks the U.S. currency against those of six trading partners, slid 0.5 percent. The greenback weakened 0.6 percent against the Australian dollar and New Zealand’s currency.
Greece, Italy
The yield on the Greek 10-year bond fell for the third day, declining 23 basis points. That drove the difference in yield with benchmark German bunds down by 18 basis points to 2,085 basis points. The yield on Italy’s 10-year bond was little changed at 5.64 percent after the government sold 7.9 billion euros ($10.8 billion) of debt. The Portuguese 10-year yield dropped 36 basis points, falling for a second day, with similar- maturity Irish yields retreating for the fourth straight day.
The Markit iTraxx Crossover Index of 50 mostly junk-rated European companies climbed six basis points to 807, snapping four days of declines, JPMorgan Chase & Co. prices show.
The yield on the 10-year U.S. Treasury note was little changed at 1.98 percent before the government auctions $29 billion of seven-year notes, the last of three sales this week.
The MSCI Emerging Market Index rose 0.2 percent, trimming this quarter’s slump to 22 percent, the worst performance since 2008. Turkey’s ISE National 100 Index rose 1.1 percent, led by banks, on speculation the country’s debt may be upgraded. South Korea’s Kospi Index jumped 2.7 percent and benchmarks in Russia, Poland and Hungary climbed at least 0.9 percent.
The Shanghai Composite Index dropped 1.1 percent to a 14- month low on concern growth will slow, and the cost of insuring Chinese government debt rose 9.5 basis points to 182.5, the highest since March 2009, according to CMA.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Shiyin Chen in Singapore at schen37@bloomberg.net.
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
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