U.S. Stocks, Commodities Gain as Dollar Drops After Jobs Data
Asian stocks rose for a third day and the won led the region’s currencies toward a weekly gain before a report on U.S. payrolls that may add to evidence the global recovery is strengthening.
The MSCI Asia Pacific Index added 0.6 percent to 132.76 at 3 p.m. in Tokyo, on course for a 3 percent gain this week. Standard & Poor’s 500 Index futures slid 0.2 percent. The won strengthened 0.9 percent to 1,138.55 per dollar. The euro was headed for a fourth weekly loss against the dollar on concern European Central Bank President Jean-Claude Trichet will signal today the bank won’t take further steps to stem the region’s sovereign debt crisis. Gold advanced as China increased imports.
Stocks are rebounding from three weeks of losses before reports today that may show U.S. payrolls gained for a second month and European retail sales increased after data on home sales and retail purchases in the world’s largest economy topped estimates. Trichet will speak at ECB’s monthly news conference after the central bank yesterday kept its benchmark interest rate at a record low and extended an emergency loan program.
“The economic data is clearly improving,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors Ltd., which manages about $93 billion. “U.S. housing is showing signs of life and the employment trend is finally looking encouraging. The easing of European debt concerns is releasing a handbrake on markets.”
Australia’s S&P/ASX 200 Index rose 0.4 percent while Taiwan’s Taiex index gained 0.5 percent. James Hardie Industries SE, the biggest seller of home siding in the U.S., jumped 6.2 percent. Hon Hai Precision Industry Co., the world’s largest contract maker of electronics, added 3.2 percent after saying it will boost its investments in China by more than $330 million.
The Shanghai Composite Index fell 0.2 percent. Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, dropped 0.9 percent after the Xinhua News Agency reported that China will adopt a “proactive” fiscal policy and strengthen flexibility of macroeconomic controls next year.
In the U.S., employers added 150,000 workers last month after a 151,000 gain in October, a separate Bloomberg survey showed before the Labor Department report today. Data yesterday showed pending sales of U.S. existing houses unexpectedly jumped by a record 10 percent in October, following a 1.8 percent drop in September, while claims for jobless benefits over the past month on average dropped to a two-year low.
Retail sales in the 16-nation euro area rose 0.2 percent in October from September, when they slipped a revised 0.1 percent, according to economists surveyed by Bloomberg News before the European Union’s data today.
The cost of insuring Asian bonds with credit-default swaps fell, according to credit-default swap traders. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan dropped 4 basis points to 109 basis points, Royal Bank of Scotland Group Plc prices show. The risk benchmark is heading for its lowest close since Nov. 24, according to CMA.
The Markit iTraxx Australia index fell 3 basis points to 111 while the Markit iTraxx Japan index fell 0.5 basis point to 97, according to Morgan Stanley and RBS.
The Bloomberg-JPMorgan Asia Dollar Index was set for a 0.7 percent gain this week as improving economic growth data and a rally in stocks drew foreign purchases. South Korea’s won was headed for a 1.8 percent advance for the week while Thailand’s baht has gained 0.5 percent this week.
The euro was at $1.3208 from $1.3209 in New York yesterday, having lost 0.3 percent this week. The single currency traded at 110.52 yen from 110.73 yen, down 0.8 percent this week. The yen was little changed at 83.67 per dollar from 83.82.
Trichet yesterday said the ECB will keep mopping up extra liquidity from its bond purchases, triggering a surge in bonds across the euro region’s periphery. The yield on Portuguese 10- year debt dropped 51 basis points to 6.12 percent and Irish yields fell 38 basis points to 8.75 percent.
Concern Europe’s debt crisis will worsen has shifted to Portugal and Spain since Nov. 28, when the region’s governments gave Ireland an 85 billion-euro ($112 billion) rescue package. Standard & Poor’s said yesterday it may cut Greece’s long-term sovereign rating as proposed European Union rules threaten to hurt bondholders.
“The ECB’s measures do not fully address liquidity or solvency concerns that have damaged market sentiment,” said Yuki Sakasai, a currency strategist at Barclays Bank Plc in Tokyo. “We suspect this points to further euro weakness for the time being, although the chances of a sharp decline have been reduced by continued progress on sovereign issues.”
Gold for immediate delivery rose 0.5 percent to $1,391.55 an ounce, boosting this week’s gain to 2 percent. China’s gold imports jumped almost fivefold in the first 10 months from the entire amount last year as concern about inflation increased gold’s appeal, the Shanghai Gold Exchange said yesterday.
China central bank adviser Xia Bin urged the nation to consider adding to its gold reserve as a long-term strategy to pave the way for the yuan’s internationalization, according to a commentary in the China Business News today.
Prices of other metals and crude oil retreated after a surge yesterday. Zinc slipped 0.9 percent to $2,240 a metric ton on the London Metal Exchange after yesterday jumping 4.6 percent, the most in four months. Crude slipped 0.3 percent to $87.73 a barrel on the New York Mercantile Exchange after rising to close at a two-year high yesterday.
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