By Stephen Kirkland and Lynn Thomasson - Jan 9, 2012 5:02 PM GMT+0700
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The euro rose, rebounding from the lowest level since September 2010 against the dollar. Photographer: Jock Fistick/Bloomberg
Jan. 9 (Bloomberg) -- Peter Esho, Sydney-based chief market analyst at City Index Australia Pty, talks about the outlook for global stocks and his investment strategy. Esho also discusses the euro. He speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
The euro rebounded from the lowest level against the dollar since September 2010 as leaders began discussing plans to shore up the currency. European stocks were little changed, while Chinese shares and commodities gained.
The euro appreciated 0.5 percent to $1.2775 at 10 a.m. in London, snapping a three-day decline. The German 10-year bund yield increased three basis points. The Stoxx Europe 600 Index and Standard & Poor’s 500 Index futures swung between gains and losses. The Shanghai Composite Index advanced 2.9 percent, and Hungary’s BUX Index rose 2.1 percent. The S&P GSCI (SPGSCI) gauge of 24 raw materials climbed 0.6 percent as wheat jumped 1.8 percent.
German Chancellor Angela Merkel and French President Nicolas Sarkozy are meeting in Berlin to consider measures designed to rescue the euro over the next three months. A round of talks among euro-area leaders will follow before the next summit in Brussels on Jan. 30. Alcoa Inc. is due to release fourth-quarter results after the market closes today, unofficially starting the U.S. earnings season.
“It looks like it’s a bit of a relief rally,” said Chris Walker, a currency strategist at UBS AG in London. “The euro’s picked up as traders don’t want to be caught short ahead of the Sarkozy-Merkel meeting. We’re not looking for any new policy to be announced today, but there’s still some headline risk.”
The euro climbed 0.3 percent versus the yen, after sliding to the lowest since December 2000. The Dollar Index (DXY), which tracks the U.S. currency against those of six trading partners, slipped 0.3 percent, falling for the first time in four days.
Greek Bonds
The yield on the Greek two-year note jumped 71 basis points to 136.22 percent, with the price falling to about 27 percent of face value. The Spanish 10-year yield declined three basis points, narrowing the difference with bunds by five basis points, while the Portuguese-German 10-year spread widened by eight basis points.
The cost of insuring against default on European sovereign debt rose to a record, with the Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments climbing as much as four basis points to 386, before trading little changed.
The yield on the 10-year Treasury note (USGG10YR) rose one basis point to 1.97 percent. The government will sell $32 billion of three- year notes tomorrow, $21 billion of 10-year debt the following day, and $13 billion of 30-year bonds on Jan. 12.
Two shares rose for every one that fell in the Stoxx 600. GlaxoSmithKline Plc (GSK) lost 2.5 percent, the most in two months, after the U.K.’s biggest drugmaker said it will hold further talks with U.S. regulators on requirements for a filing for the experimental drug Relovair for use against asthma.
Chinese Lending
The MSCI Emerging Markets Index (MXEF) added 0.4 percent. Chinese stocks gained the most in almost three months after the central bank reported lending and money supply growth that exceeded economists’ estimates in December. Hungarian shares rose for the first time in five days after Prime Minister Viktor Orban told state news service MTI yesterday his government was open to “any kind” of credit line with the International Monetary Fund.
The BSE India Sensitive Index declined 0.6 percent after Prime Minister Manmohan Singh said the economy will have grown about 7 percent in the year to March 31, less than a December forecast of 7.5 percent.
Wheat jumped to $6.35 a bushel, the first increase in four days. Silver gained 1.2 percent to $29.1225 an ounce and corn and soybeans advanced more than 1 percent. Oil in New York was little changed at $101.60 a barrel.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net
To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net
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