By Stephen Kirkland - Nov 3, 2011 5:24 PM GMT+0700
Nov. 3 (Bloomberg) -- Bloomberg's Stephen Engle reports on China's potential role in helping European governments resolve the region’s sovereign-debt crisis. China's Vice Finance Minister Zhu Guangyao said yesterday it’s "too soon" for China to discuss further bond purchases from Europe’s revamped rescue fund. Zhu spoke in Cannes, France, on the eve of a summit of world leaders. (Source: Bloomberg)
Nov. 3 (Bloomberg) -- Erik Ristuben, New York-based chief investment officer at Russell Investments, talks about the impact of Europe's debt crisis on the U.S. economy and financial markets. Ristuben speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
European stocks and U.S. index futures rebounded and the euro strengthened. The yield on Greece’s two-year note surpassed 100 percent and Italy’s bond risk approached a record after a Greek bailout was halted.
The Stoxx Europe 600 Index added 1.3 percent at 10:20 a.m. in London, after dropping 1.5 percent. Standard & Poor’s 500 Index futures gained 0.6 percent. The euro appreciated against all but two of its 16 major peers. Greek two-year yields climbed to 107.26 percent, and the extra yield investors demand to hold French 10-year bonds instead benchmark German bunds rose to a euro-era record. Copper slid 0.9 percent.
German and French leaders holding emergency talks on the eve of a Group of 20 summit today in Cannes, France, withheld 8 billion euros ($11 billion) of assistance. They warned Greece will surrender all European aid if it votes against a bailout package agreed last week to contain the crisis. European Central Bank President Mario Draghi will chair a meeting of the bank’s governing council for the first time.
“Following last night’s threat to withhold funds we appear to have a bit of a Mexican standoff with a disorderly default now a very real possibility,” Gary Jenkins, head of fixed income at Evolution Securities Ltd. in London, wrote in a note.
Six shares gained for each one that fell in the Stoxx 600. Cable & Wireless Communications Plc (CWC) jumped 15 percent after first-half profit rose.
S&P 500 futures signaled the gauge will extend yesterday’s 1.6 percent advance before a report that may show U.S. service industries grew at a faster pace in October.
Jobless Claims
The Institute for Supply Management’s non-manufacturing index rose to 53.5 from 53 in September, according to the median estimate of 77 economists surveyed by Bloomberg. Readings above 50 signal expansion. Productivity rebounded and jobless claims declined, other data may show.
Italian bonds slid, with the 10-year yield jumping as much as 21 basis points to 6.40 percent, the highest since before the 17-nation currency was introduced in 1999. The Spanish five-year note yield advanced 15 basis points as the nation sold 4.49 billion euros of 2016 and 2014 securities out of a maximum target of 4.5 billion euros. Demand for the benchmark five-year note was 1.62 times the amount sold, compared with 1.76 times when it was last sold on Sept. 1.
The yield on French 10-year bonds increased 15 basis points as the government auctions the debt along with 2017 and 2026 securities.
Euro Gains
The euro strengthened 0.2 percent to $1.3779 and rose 0.2 percent versus the yen. The Dollar Index, which tracks the U.S. currency against those of six trading partners, slipped 0.2 percent after climbing as much as 0.6 percent.
Copper fell to $7,783 a metric ton and gasoline dropped to $2.6086 a gallon. European Union carbon permits slipped to their lowest since Feb. 16, 2009.
The MSCI Emerging Markets Index slid 1 percent, set for its lowest close since Oct. 26. The Hang Seng China Enterprises Index fell 1.4 percent after an index of non-manufacturing industries fell in September. South Korea’s Kospi Index (KOSPI) lost 1.5 percent. The Micex Index slid 0.6 percent in Moscow.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
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