By Stephen Kirkland and Lynn Thomasson - Mar 8, 2012 8:40 PM GMT+0700
Stocks (MXWD) rose for a second day and commodities gained after Germany’s industrial output increased more than forecast and Japan’s economy shrank less than initially estimated. The euro strengthened and Italian bonds advanced as Greece moved closer to completing its debt swap.
The MSCI All-Country World Index (MXWD) added 0.9 percent at 8:35 a.m. in New York. Standard & Poor’s 500 Index futures increased 0.7 percent. The euro appreciated 0.7 percent to $1.3238, while the yen weakened against all 16 of its most-traded peers. The yield on the 10-year Italian bond slid 14 basis points to 4.80 percent. The S&P GSCI gauge of commodities climbed 0.7 percent, led by gains in industrial metals.
Japan’s gross domestic product shrank an annualized 0.7 percent in the fourth quarter, compared with an earlier estimate for a 2.3 percent contraction. Photographer: Tomohiro Ohsumi/Bloomberg
March 8 (Bloomberg) -- Marino Valensise, chief investment officer at Baring Asset Management Ltd., discusses Greece's debt problems, China's economic growth and the outlook for emerging market stocks. He speaks with Susan Li on Bloomberg Television’s "First Up." (Source: Bloomberg)
March 8 (Bloomberg) -- Arjuna Mahendran, the Singapore-based head of Asia investment strategy at HSBC Private Bank, talks about the outlook for global financial markets and his investment strategy. Mahendran speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
March 8 (Bloomberg) -- Geoffrey Yu, a currency analyst at UBS AG, discusses participation in the Greek debt swap, the outlook for the euro and European Central Bank monetary policy. He speaks with Caroline Hyde and Linda Yueh on Bloomberg Television's "First Look." (Source: Bloomberg)
German production rose 1.6 percent in January, the government said before Labor Department data showed U.S. jobless claims increased. Japan’s gross domestic product shrank an annualized 0.7 percent in the fourth quarter, compared with an earlier estimate for a 2.3 percent contraction, the government said. Investors with about 60 percent of eligible Greek bonds have agreed to participate in the world’s biggest sovereign debt restructuring.
“We have space to rally,” Marino Valensise, chief investment officer at Baring Asset Management Ltd. said in a Bloomberg Television interview from Hong Kong. The firm oversees $46 billion. “Greece is okay for now, but this is a short-term solution to a longer-term problem.”
The Stoxx Europe 600 Index climbed 1.3 percent as 10 shares advanced for every one that fell. European Aeronautic, Defence & Space Co. (EAD) rallied 8.8 percent to a five-year high after doubling its dividend and predicting earnings will climb. Gemalto NV jumped 4.3 percent as the inventor of the smart chip used in bank and phone cards forecast revenue and operating profit will increase this year.
Jobless Claims
The increase in S&P 500 futures indicated the U.S. gauge will climb for a second day. Applications for unemployment insurance payments increased to 362,000 last week, Labor Department figures showed. Economists forecast 352,000 claims, according to the median estimate in a Bloomberg News survey. The Labor Department will report monthly jobs data tomorrow, which economists forecast will show an increase of 225,000 private jobs and total non-farm payrolls growth of 210,000.
The 17-nation euro appreciated 1.5 percent against the yen, rising for the second consecutive day versus the Japanese and U.S. currencies. The pound rose 0.4 percent versus the dollar as the Bank of England kept the benchmark rate at 0.5 percent and maintained its bond purchase target.
Bunds Fall
The extra yield investors demand to hold Italian 10-year debt instead of benchmark German bunds fell 18 basis points, with the Spanish-German yield spread narrowing eight basis points. The yield on the bund advanced four basis points, snapping a two-day decline.
The cost of insuring against default on European sovereign debt fell for a second day. The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments dropped five basis points to 349.
Copper advanced 1.2 percent and New York oil increased 0.8 percent to $107.01 a barrel. Lead jumped 2.3 percent.
The MSCI Emerging Markets Index (MXEF) rose 1.2 percent, snapping a three-day slump. Hon Hai Precision Industry Co. (2317) led Apple Inc. suppliers higher after the U.S. company introduced a new version of its IPad. The ISE National 100 Index (XU100) gained 1.5 percent in Istanbul and China’s Shanghai Composite Index (IFB1) increased 1.1 percent. Vietnam’s VN Index (VNINDEX) sank 2.8 percent, the biggest drop among major stock benchmarks tracked by Bloomberg, after the government raised gasoline prices.
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: Stuart Wallace at swallace6@bloomberg.net
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