By Lynn Thomasson and Norie Kuboyama - Mar 2, 2012 2:10 PM GMT+0700
European equity futures rose, while the yen weakened and Asian stocks headed for a record 11th weekly gain after U.S. jobless claims matched a four-year low and Europe’s leaders agreed to speed payments to a bailout fund.
Euro Stoxx 50 Index futures added 0.4 percent as of 7 a.m. in London. Standard & Poor’s 500 Index futures slipped less than 0.1 percent and the MSCI Asia Pacific Index (MXAP) climbed 0.3 percent. The yen fell 0.5 percent against the dollar, sliding against all of its major peers. German 10-year bond yields dropped two basis points to 1.85 percent. Industrial metals advanced, led by nickel and tin. Oil declined 0.2 percent after touching $110.55 a barrel yesterday.
Asian stocks entered a bull market this week and have rallied 20 percent from a two-year low in October. Photographer: Haruyoshi Yamaguchi/Bloomberg
March 1 (Bloomberg) -- The number of Americans filing first-time claims for jobless benefits fell 2,000 to 351,000, a level matching a four-year low, Labor Department figures showed today. Consumer spending rose 0.2 percent in January, less than forecast, while incomes increased 0.3 percent, according to the Commerce Department. Michael McKee and Betty Liu report on Bloomberg Television's "In the Loop." (Source: Bloomberg)
March 2 (Bloomberg) -- Herald van der Linde, head of equity strategy for Asia-Pacific at HSBC Holdings Plc, talks about the region's stocks and investment strategy. He speaks in Hong Kong with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
March 2 (Bloomberg) -- Markus Rosgen, Hong Kong-based chief Asian strategist at Citigroup Inc., talks about the outlook for global stocks and the impact of Europe's Long-Term Refinancing Operation on markets. Rosgen speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Chinese policy makers may introduce proposals to support economic growth at the annual National People’s Congress next week. Euro-area finance ministers authorized the region’s bailout fund to issue bonds for the Greek debt restructuring, while the International Swaps & Derivatives Association said $3.25 billion in Greek credit-default swaps won’t be triggered. U.S. initial jobless claims fell 2,000 to 351,000 last week, less than economist estimates.
“The U.S. economy overall is headed for a mild recovery, and that’s supporting stocks,” said Kiyoshi Ishigane, a Tokyo- based strategist at Mitsubishi UFJ Asset Management Co., which oversees about $84 billion. “The Greek debt crisis isn’t fully resolved yet, but it has calmed down for now.”
U.S. Stocks
S&P 500 futures expiring in March were at 1,373.70. The U.S. equity gauge has the potential to reach a record high of 1,700 this year if economic growth surprises investors the same way falling bond rates did in 1995, Birinyi Associates Inc. said. Reaching that level would mean a 24 percent rally from yesterday’s close of 1,374.09, data compiled by Bloomberg show.
Another round of U.S. monetary stimulus is “definitely not off the table,” said John Williams, president of the Federal Reserve Bank of San Francisco, in Honolulu today.
The euro strengthened 0.4 percent to 108.36 yen. Euro-area finance ministers authorized the region’s bailout fund to raise money for Greece’s bond exchange, the first step in releasing funds from a 130 billion-euro ($173 billion) rescue package. Euro governments might pay the first two annual installments into the 500 billion-euro ($666 billion) fund this year and complete the capitalization in 2015, a year ahead of schedule. A decision will come later today.
“There will be an acceleration,” European Union President Herman Van Rompuy told reporters in Brussels late yesterday. “It could be starting with the payment of two tranches in 2012 but we have to take a definite decision.”
Greek Default Swaps
The yield on Greece’s 10-year bond rose 165 basis points to a record 36.44 percent yesterday. The ISDA made its decision on Greek default swaps after it was asked to rule whether part of the nation’s $170 billion bailout was a credit event. The group will now probably be asked to determine whether collective action clauses, or CACS, being used by Greece to impel investors to participate in a wider exchange of bonds that would trigger the swaps.
The Shanghai Composite Index (SHCOMP) rose 1.3 percent and the Hang Seng China Enterprises Index climbed 1.1 percent. The National People’s Congress, whose meeting will run for a week and a half, is legally the highest governmental body in China. Its members are some of China’s most powerful politicians and executives, wielding power in their home provinces and weighing in on proposals such as whether to impose a nationwide property tax.
China’s Stocks
“Investors are hoping there’ll be more reforms that may boost the market,” said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co., which oversees $285 million. “Better liquidity these days is also helping the market reach highs.”
Three stocks rose for each that fell in the MSCI Asia- Pacific gauge. The index entered a bull market this week after rallying 20 percent from a two-year low in October. The Nikkei 225 Stock Average (NKY) gained 0.7 and Australia’s S&P/ASX 200 Index increased 0.4 percent.
Shipping companies advanced after container freight rates on Asia to Europe routes more than doubled, according to estimates by Drewry Shipping Consultants Ltd. STX Pan Ocean Co. (028670), a South Korean shipper, jumped 9 percent. Kawasaki Kisen Kaisha Ltd., Japan’s third-biggest carrier, climbed 7.6 percent.
The yen traded near a nine-month low against the dollar after a government report showed Japanese consumer prices fell for a fourth month, boosting speculation the central bank will expand monetary easing. Japan’s 10-year rate rose one basis point to 0.985 percent, the highest since Feb. 10.
Oil, Copper
Oil for April delivery declined 0.2 percent to $108.63 a barrel in electronic trading on the New York Mercantile Exchange. Crude yesterday climbed above $110 a barrel for the first time since May after Iran’s Press TV reported an explosion on a pipeline in Saudi Arabia. There was no sabotage at oil facilities in the Qatif area, Major General Mansour Al-Turki, a spokesman for Saudi Arabia’s Interior Ministry, said after the report.
Copper rose 0.3 percent after inventories tracked by the London Metal Exchange fell to the lowest since August 2009, bourse data showed yesterday. Nickel climbed 1.6 percent to $19,800 a ton and tin advanced 1 percent to $24,000 a ton.
Ten-year Treasury yields held at 2.03 percent. Government securities have dropped 0.5 percent in 2012, while U.S. company debt returned 3.3 percent, Bank of America Merrill Lynch data show.
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
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