Bloomberg News

Stocks, Commodities Rise Before Fed Speech; Dollar Drops

August 31, 2012

Asian Stocks Fall, Yen Gains on Growth Concern; Gasoline Slides

Industrial & Commercial Bank of China Ltd. led the nation’s biggest lenders in posting slower profit growth in the second quarter. Photographer: Nelson Ching/Bloomberg

European stocks rose for the first time in four days and commodities advanced before a speech by Federal Reserve Chairman Ben S. Bernanke. The dollar weakened while Spanish 10-year yields climbed to a two-week high.

The Stoxx Europe 600 Index added 0.8 percent at 6:50 a.m. in New York. Standard & Poor’s 500 Index futures increased 0.6 percent. The Dollar Index sank 0.5 percent and Treasuries slipped, paring a weekly advance. Spain’s 10-year yield reached 6.68 percent, the highest since Aug. 16. The S&P GSCI gauge of raw materials climbed 0.4 percent.

Bernanke is scheduled to speak at a meeting of central bankers today in Jackson Hole, Wyoming, where his address in 2010 preceded a second round of quantitative easing. Spain may pump its own money into Bankia group rather than use the emergency portion of a European Union bailout, two people with direct knowledge of the matter said. Reports today showed unemployment in the euro area rose to a record in July, deflation in Japan and an unexpected drop in South Korea’s industrial output.

“Bernanke may reiterate his stance on accommodative policy and expand upon some of the policies and the impact they’ve had thus far and going forward, but in terms of bond purchases or expansion of balance sheet, we don’t think we’ll get that at Jackson Hole,” Jerry Cudzil, head of U.S. credit trading TCW Group Inc., said in a Bloomberg Television interview. “At this point, what the market could be either disappointed or excited with is what happens in the euro zone.”

Iliad Jumps

The Stoxx 600 has declined 0.3 percent this week, trimming its third straight monthly advance. Iliad SA climbed 4.7 percent to a record today as the French wireless company reported earnings that topped estimates and won 3.6 million subscribers in the first six months of its venture into mobile. Aeroports de Paris, the operator of the Charles de Gaulle and Orly airports, fell 2.9 percent after first-half net income dropped.

The gain in S&P 500 futures indicated the U.S. gauge will extend its August advance. A Commerce Department report at 10 a.m. in Washington may show that factory orders climbed 2 percent in July, according to a Bloomberg survey of 60 economists. A barometer of U.S. business activity from the Institute for Supply Management-Chicago Inc. decreased to 53.2 in August from 53.7 in July, a separate survey showed.

The dollar weakened against 14 of its 16 major peers, slipping most against South Africa’s rand and the Swedish krona. The euro strengthened 0.5 percent to $1.2574.

Treasuries Fall

The 10-year Treasury yield climbed two basis point to 1.65 percent. While the yield has fallen from 1.69 percent on Aug. 24, it’s still headed for the biggest monthly increase since March. The rate on similar-maturity German bunds rose five basis points to 1.38 percent.

Oil advanced 0.5 percent to $95.12 a barrel in New York and copper rose 0.3 percent.

The MSCI Emerging Markets Index (MXEF) rose 0.2 percent, snapping a five-day slump and trimming this month’s drop to 0.7 percent. Russia’s Micex Index increased less than 0.1 percent. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong slipped 0.7 percent. South Korea’s Kospi slipped less than 0.1 percent.

To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net

To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net


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