The euro climbed against the dollar and Europe’s benchmark stock index gained while gold advanced. Japanese stocks rose as Prime Minister Shinzo Abe prepares to call an election, delay a tax increase and boost stimulus.
The euro strengthened 0.3 percent by 8:17 a.m. in London as the Bloomberg Dollar Spot Index fell 0.1 percent. The Stoxx Europe 600 Index climbed 0.3 percent while Standard & Poor’s 500 Index futures were little changed. The Hang Seng Index China Enterprises Index (HSCEI) lost 1.2 percent after home prices fell in 69 of 70 mainland cities last month. The Topix index added 2.1 percent and yields on 10-year Japanese bonds rose 2 1/2 basis points. Gold advanced 0.6 percent and European bonds gained.
Reports on U.K. and U.S. producer prices are due with a survey of German investor confidence. Abe, scheduled to speak later today, is set to order further stimulus measures and announce the postponement of a sales-tax increase before sending Japan to the polls on Dec. 14, according to people familiar with discussions among lawmakers. The country’s central bank started a two-day meeting today after data yesterday showed the world’s third-largest economy plunged back into recession.
“Outside of the U.S., there is fragility in the global economy, it’s flying on one engine and that has implications for monetary-policy settings,” Chris Green, director of economics and strategy at First NZ Capital Ltd., said by phone from Auckland. “Given the reaction that the economy has had, this is not an appropriate time for another sales-tax increase in Japan.”
The dollar weakened against most major peers. The euro bought $1.2485. The U.K. pound added 0.2 percent to $1.5662 as the yield on 10-year gilts slipped three basis points to 2.09 percent.
Keystone Approval
The Canadian dollar rose 0.4 percent to C$1.1267. U.S. Senator Mary Landrieu and a co-sponsor of a bill to approve TransCanada Corp.’s Keystone XL pipeline are expressing confidence they’ll have the 60 votes needed to pass it.
Indonesia’s rupiah climbed 0.5 percent to 12,145 per dollar today. announced an increase in fuel prices to reduce state energy subsidies yesterday, fulfilling a key election pledge of new President Joko Widodo in a bid to narrow the country’s budget deficit.
Australia’s dollar strengthened 0.1 percent to 87.19 U.S. cents after the nation’s central bank reiterated that benchmark interest rates will remain at a record low for a period and said the currency, known as the Aussie, remains overvalued. The New Zealand dollar climbed 0.4 percent to 79.38 U.S. cents.
Stoxx 600
The number of stocks rising was more than double those that declined on the Stoxx 600 today.
SBM Offshore NV plunged 5.7 percent after Petroleo Brasileiro SA suspended the firm from supply contracts amid bribery allegations.
Hong Kong’s Hang Seng Index slipped 1.1 percent, while the China Enterprises gauge retreated for a third day. Both indexes slumped more than 1.2 percent yesterday on the first day of a new stock-exchange link between Shanghai and Hong Kong.
Hong Kong Exchanges & Clearing Ltd. dropped 2.4 percent after sliding 4.5 percent yesterday as mainland investors failed to use up their quota for buying Hong Kong shares. About 60 percent of the daily allowance for purchases of Shanghai shares from Hong Kong remained unused today after being exhausted yesterday.
The Shanghai Composite Index declined 0.7 percent today as falling home prices added to concerns that an economic slowdown will deepen. Prices dropped in 69 of 70 cities in October from September, the National Bureau of Statistics said today. That’s the same as in September, which was the most since January 2011 when the government changed the way it compiles the data.
Japan Stocks
Japan’s Nikkei 225 Stock Average climbed 2.2 percent. The gauge sank 3 percent yesterday, its biggest one-day slump since August, after data showed gross domestic product unexpectedly dropped an annualized 1.6 percent last quarter, after a 7.3 percent contraction in the preceding three months. An index of volatility in the Nikkei 225 fell 3.2 percent today.
With public approval of his cabinet waning, Abe will order the creation of an economic-stimulus package today, said Ryu Shionoya, deputy policy chief of the ruling Liberal Democratic Party. Ten-year Japanese government bonds paid 0.505 percent.
Gold advanced to $1,193.78 and silver added 0.9 percent to $16.2857.
West Texas Intermediate crude was little changed at $75.57 a barrel, after losing 0.2 percent yesterday and surging more than 2 percent Nov. 14. Brent oil in London declined 0.4 percent to $79.02.
Members of the Organization of Petroleum Exporting Countries are stepping up diplomacy before their Nov. 27 meeting, which will see a discussion over production levels. Iran’s oil minister is preparing to visit the United Arab Emirates this week, according to Shana, the Tehran-based ministry’s news service.
To contact the reporters on this story: Emma O’Brien in Wellington at eobrien6@bloomberg.net; Nick Gentle in Hong Kong at ngentle2@bloomberg.net
To contact the editors responsible for this story: Nick Gentle at ngentle2@bloomberg.net Michael Patterson
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