European stocks gained for the first time in four days, the euro strengthened while Italian and Spanish bonds rose as policy makers weighed bailout options for Cyprus. Chinese shares jumped the most in two months and commodities rebounded.
The Stoxx Europe 600 Index (SXXP) added 0.2 percent at 7:10 a.m. in New York, and Standard & Poor’s 500 Index futures increased 0.3 percent. The euro appreciated against 14 of its 16 major peers and Italy’s 10-year bond yield fell eight basis points to 4.65 percent. The Shanghai Composite Index climbed 2.7 percent and the yuan advanced to a 19-year high. South Korean stocks slid in the last minute of trading after a possible cyberattack shut down some computer networks. Brent crude gained 0.6 percent and copper rose 1 percent.
Luxembourg’s Luc Frieden called for his fellow euro-area finance ministers to reconvene “as soon as possible” on a new package for Cyprus after lawmakers rejected a bank deposit levy that would have helped fund a bailout. The Federal Reserve will probably say today it will keep buying bonds to stimulate the U.S. economy until the fourth quarter, according to analysts in a Bloomberg survey.
Cyprus “has some symbolism impact on Europe, but it’s not a really major economic issue,” Laurence D. Fink, the chief executive officer of BlackRock Inc., the world’s largest asset manager with about $3.8 trillion in assets, said in a Bloomberg Television interview in Hong Kong today. “It does remind us of the frailty of Europe. It does remind us that the European fix will be multiple years.”
Three shares climbed for every two that fell in the Stoxx 600, helping it rebound from the longest losing streak in a month. National Bank of Greece SA and Italy’s Banca Popolare di Milano Scarl led a rally in banks, advancing more than 5 percent. Metro AG dropped 2.5 percent as Germany’s biggest retailer forecast a decline in operating profit.
The gain in S&P 500 futures indicated the U.S. equities gauge will snap a three-day, 1 percent decline. Adobe Systems Inc. (ADBE:US) climbed 5.4 percent in pre-market New York trading after the software maker reported fiscal first-quarter sales and profit that exceeded analysts’ estimates. The yield on 10-year Treasuries rose three basis points to 1.93 percent. The Dollar Index slid 0.2 percent, snapping a two-day gain.
The yield on Spain’s 10-year note declined four basis points to 5 percent. German bonds dropped for the first time in five days on reduced demand for Europe’s safest fixed-income assets. The 10-year bund yield rose two basis points to 1.36 percent after falling to 1.34 percent yesterday, the lowest since Jan. 2.
The euro advanced 0.5 percent versus the yen. It snapped a two-day drop against the dollar to trade 0.3 percent higher at $1.2914.
The pound gained against the dollar, reversing earlier declines, after minutes of the Bank of England’s policy meeting this month showed Governor Mervyn King was defeated for a second month in a vote to expand stimulus. Chancellor of the Exchequer George Osborne delivers his annual budget today. Sterling rose 0.2 percent to $1.5125, after losing as much as 0.5 percent.
The S&P GSCI gauge of 24 commodities advanced 0.5 percent, the first gain this week. Brent rose to $108.05 a barrel. Copper led metals higher in London. Wheat jumped 1.2 percent.
The MSCI Emerging Market Index (MXEF) added 0.1 percent, snapping a seven-day slump, the longest losing streak in four months.
Stocks rallied in Shanghai after Tom DeMark, the founder of Market Studies LLC, said the gauge will rebound this week to resume a rally from a December low that will leave it 48 percent higher within the next six months. DeMark correctly predicted a retreat in the Chinese domestic stock gauge last month.
The yuan gained 0.1 percent to 6.2121 versus the dollar, after touching 6.2120, the strongest level since the government unified the official and market rates at the end of 1993. The People’s Bank of China set the currency’s reference rate at the strongest level since Jan. 15 amid U.S. Treasury Secretary Jacob L. Lew’s visit to Beijing for talks.
The Kospi Index declined 1 percent to the lowest in more than a month. South Korea is investigating the simultaneous shutdown of computer networks at several major broadcasters and banks. The won weakened 0.5 percent after the government said it will consider steps to curb capital flows if needed.
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