By Michael Shanahan and Rita Nazareth - Dec 5, 2011 11:31 PM GMT+0700
Dec. 5 (Bloomberg) -- Joseph Tan, Singapore-based chief economist for Asia at Credit Suisse Group AG’s private-banking division, talks about China's economy and central bank monetary policy. A Chinese services index declined last month as the government’s campaign to curb inflation and asset prices damped demand. Tan speaks with John Dawson on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Dec. 5 (Bloomberg) -- Jesper Koll, head of equity research at JPMorgan Chase & Co. in Tokyo, talks about Japanese stocks and the nation's economy. Koll speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Dec. 5 (Bloomberg) -- Clive McDonnell, Singapore-based head of emerging-market equity strategy for Standard Chartered Plc, talks about the outlook for emerging markets in Asia and their exposure to Europe's debt crisis. McDonnell also discusses the U.S. jobless rate. He speaks with John Dawson on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Stocks (MXAP) rose, adding to the biggest weekly gain since March 2009, the euro strengthened and Italian borrowing costs dropped to a one-month low as Prime Minister Mario Monti proposed budget cuts and Germany and France pushed for a new European Union treaty to fight the debt crisis.
The MSCI All Country World Index climbed 1.2 percent as of 11:30 a.m. in New York, adding to an 8.4 percent rally last week. The Standard & Poor’s 500 Index advanced 1.6 percent and the Stoxx Europe 600 Index increased 1 percent, led by banks, while the euro appreciated 0.5 percent to $1.3452. The yield on the 10-year Italian bond slid 72 basis points to 5.96 percent. Oil rose for a second day, approaching $102 a barrel.
Monti will present the 30 billion-euro ($40 billion) plan, designed to reduce the euro-region’s second-biggest debt, to policy makers in Rome today. France and Germany want a new EU treaty to set out rules for euro area governments, French President Nicolas Sarkozy said after meeting with German Chancellor Angela Merkel, who said the region’s leaders will seek to “win back a bit of trust” at a summit on Dec. 9.
"France and Germany know how serious the problem is," Frederic Dickson, who helps oversee $28 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon, said in a telephone interview. "There’s a lot of anticipation that there will be positive comments coming out of Europe this week."
Global Rally
The MSCI All-Country World Index posted a sixth consecutive day of gains, the longest winning streak since October, and the Stoxx 600 rose for a second day. Italy’s FTSE MIB Index rallied 3 percent as Banca Monte dei Paschi di Siena SpA and Banco Popolare SC climbed more than 10 percent. Michael Page International Plc slumped 6 percent in London after the recruiter said annual pretax profit will miss analyst estimates.
The S&P 500 added to last week’s 7.4 percent rally, its biggest since March 2009. Banks led gains today, with JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. rising at least 3.6 percent to pace an advance in a 78 of 80 financial companies in the index.
MetLife Inc., the largest U.S. life insurer, climbed 4.4 percent after saying earnings will probably climb in 2012 as Chief Executive Officer Steven Kandarian reshapes management a year after the firm’s biggest acquisition.
Equities maintained gains as the Institute for Supply Management’s non-manufacturing index fell to 52 in November from 52.9 a month earlier. Fifty is the dividing line between expansion and contraction and the measure was projected to rise to 53.9, according to the median forecast in a Bloomberg News survey.
Treasuries fell, pushing the yield on the 10-year note up six basis points to 2.09 percent.
Bond Spreads
French 10-year bonds outperformed benchmark German bunds, narrowing the difference in yield, or spread, between the securities by 20 basis points to 93 points. The Spanish 10-year yield tumbled 54 basis points to 5.14 percent, dropping for the sixth consecutive day, the longest run of declines since August.
Germany sold 2.675 billion euros of six-month bills to yield 0.0005 percent, while the Netherlands sold 1.1 billion euros of 176-day bills and 1 billion euros of 84-day securities.
Merkel’s government won’t stand in the way of the Bundesbank helping to fight the debt crisis by channeling loans through the International Monetary Fund, a senior Merkel ally said. Germany is keen for the IMF to adopt a “decisive role” in combating the crisis alongside the European rescue fund, Michael Meister, the parliamentary finance spokesman for Merkel’s Christian Democratic Union, said today in a telephone interview.
The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments declined seven basis points to 320, the lowest since Nov. 3. Contracts on Italy dropped 29 to 429 and Spain fell 35 to 347.
Euro Advances
The euro advanced 0.2 percent versus the yen, while the Swiss franc depreciated 0.2 percent against the 17-nation currency, falling for the fourth successive day. The pound strengthened 0.6 percent to $1.5690, snapping a two-day decline.
The MSCI Emerging Markets Index (MXEF) rose 1.1 percent, on track for its sixth straight gain in its longest winning streak since Oct. 28. The Shanghai Composite Index (SHCOMP) lost 1.2 percent after a Chinese purchasing managers’ index, a gauge of industries such as construction, retail and property, shrank for the first time since February. The Micex Index added 0.8 percent in Moscow as Prime Minister Vladimir Putin’s hold on parliament weakened. Benchmark indexes advanced more than 1.7 percent in Poland and Hungary.
The S&P GSCI index of 24 commodities climbed 0.6 percent, led by nickel, coffee, sugar and energy products. Gasoline and Brent oil gained at least 0.6 percent and crude in New York jumped 0.8 percent to $101.78 a barrel. Iran said oil will breach $250 a barrel if other nations try to ban purchases of its crude, privately owned Shargh reported, citing a Foreign Ministry spokesman.
To contact the reporters on this story: Michael Shanahan in London at mshanahan3@bloomberg.net; Rita Nazareth in Sao Paulo at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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