By Stephen Kirkland and Lynn Thomasson - Feb 23, 2012 6:18 PM GMT+0700
The euro strengthened and commodities advanced after German business confidence climbed more than forecast. European stocks erased gains and U.S. equity-index futures were little changed.
The euro appreciated 0.4 percent to $1.3297 at 6:15 a.m. in New York. The yield on the 10-year German bund increased one basis point. The Stoxx Europe 600 Index slipped 0.1 percent as the European Commission predicted the region’s economy will contract this year. Standard & Poor’s 500 Index futures added 0.1 percent, paring gains of as much as 0.5 percent. The S&P GSCI gauge of 24 commodities rose 0.5 percent and platinum jumped to a five-month high.
A gauge of business climate climbed for a fourth month in February to the highest reading since July, the Munich-based Ifo institute said. Economists predicted an increase to 108.8, according to the median of 38 estimates in a Bloomberg survey. U.S. jobless claims probably held near the lowest level since 2008, economists said before a Labor Department report today.
“Today’s Ifo report is very good news for Germany,” Annalisa Piazza, a fixed-income analyst at Newedge Group in London, said in an e-mail. It “seems to show further resilience of the economy to the ongoing external shocks,” she said.
The euro advanced against 12 of its 16 major peers, appreciating 0.4 percent versus the yen. The Dollar Index (DXY), which tracks the U.S. currency against those of six trading partners, dropped 0.3 percent.
The yield on Italy’s 10-year bond jumped five basis points to 5.56 percent, climbing for the second straight day.
Greek March Note
The Greek 4.3 percent note due March 20 erased a decline, trading at 26.76 percent of face value. The price slid the four previous days, down from 42 a week ago. The drop reflects the probability the nation will force losses on investors by implementing and triggering so-called collective action clauses, Societe Generale SA said.
“Those who bought the bond in the hope of a free ride are now paying the price,” Vincent Chaigneau, global head of interest-rate strategy in Paris, wrote in a research report today.
The 17-nation euro economy will contract 0.3 percent, the commission said, abandoning a November forecast of 0.5 percent growth. The downgrade was mainly due to projected contractions of 1.3 percent in Italy and 1 percent in Spain. Benchmark equity gauges in the two countries fell more than 1 percent.
Commerzbank Hybrid Swap
Commerzbank AG (CBK) slipped 4.8 percent as Germany’s second- largest bank said it will ask investors to swap hybrid capital instruments trading below face value for new shares. Gamesa Corp. Tecnologica SA, Europe’s second-biggest wind-turbine maker, slid 9 percent after cutting its sales forecast. Swiss Re Ltd. advanced 2.8 percent after the world’s second-biggest reinsurer increased its 2011 dividend as fourth-quarter profit exceeded analyst estimates.
The increase in S&P 500 futures indicated the U.S. gauge will rebound from yesterday’s 0.3 percent drop. Initial jobless claims rose last week to 355,000 after reaching a four-year low the prior week, according to the median of 47 estimates in a Bloomberg survey.
Hewlett-Packard Co. slid 1.9 percent in Germany after it forecast fiscal second-quarter profit that fell short of analysts’ estimates as consumers curtailed personal-computer purchases.
The MSCI Emerging Markets Index (MXEF) declined 0.4 percent, the most in a week. South Korea’s Kospi Index (KOSPI) dropped 1 percent as technology companies fell after Hewlett-Packard’s profit forecast. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong slipped 0.9 percent.
South Africa’s rand strengthened 0.7 percent against the dollar after Finance Minister Pravin Gordhan said a move to rein in the budget deficit faster than planned will shield the economy and prevent a credit-rating downgrade.
The GSCI climbed to the highest since June 10, led by gains in silver futures, nickel and natural gas. Platinum rose as much as 0.5 percent to $1,733.25 an ounce, the highest since Sept. 22, because of a strike in South Africa at the world’s biggest platinum mine.
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: Mark Gilbert at magilbert@bloomberg.net
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