Bloomberg News

Euro Strengthens While German Bunds Decline; Stocks Pare Gains

November 22, 2013

Australian Dollar

Australia’s dollar slid 0.6 percent to 91.74 U.S. cents. Photographer: Carla Gottgens/Bloomberg

The euro strengthened and bunds fell after a measure of German business confidence rose to the highest in more than 1 1/2 years. European stocks pared gains while the Australian dollar weakened for a third day.

The euro gained 0.3 percent to $1.3516 at 11:10 a.m. in London. The yield on benchmark 10-year German government bonds rose two basis points to 1.76 percent. The Stoxx Europe 600 Index added less than 0.1 percent after earlier rising as much as 0.6 percent. Futures (SPA) on the Standard & Poor’s 500 Index were little changed. Copper climbed 0.7 percent and nickel increased 0.4 percent. Australia’s dollar slipped 0.8 percent to 91.64 U.S. cents.

Germany’s Ifo business climate index climbed more than predicted in November, exceeding all 43 economist forecasts in a Bloomberg News survey. European Central Bank President Mario Draghi said policy makers will announce parameters for bank stress tests by the end of January. Reserve Bank of Australia Governor Glenn Stevens said yesterday he’s open-minded about intervention to weaken its currency.

“Every indication is for low interest rates in the developed world for a very long time,” said Daniel Weston, a portfolio manager at Aimed Capital GmbH in Munich. “Investors believe equities are the place to be.”

The 17-nation euro rose against 13 of its 16 major counterparts and added 0.4 percent to 136.85 yen, reaching its strongest level against the Japanese currency since October 2009. The yen was little changed at 101.24 per dollar.

Ten-year German bund yields rose after climbing to 1.78 percent yesterday, the highest since Nov. 13. The rate on similar-maturity Treasury notes was little changed at 2.78 percent.

Business Confidence

German business confidence rose in November. The Ifo institute’s business climate index, based on a survey of 7,000 executives, increased to 109.3 from 107.4 in October. Economists forecast a gain to 107.7, according to the median of 43 estimates in a Bloomberg News survey.

Data released today confirmed a preliminary estimate that showed German economic growth slowed to 0.3 percent in the third quarter from 0.7 percent in the previous three months. The expansion was driven by domestic demand that offset weaker exports, the report showed.

The Australian dollar is poised for a 2.2 percent loss since Nov. 15, the biggest drop among 16 major currencies tracked by Bloomberg.

Novartis, Whitbread

Sweden’s krona gained 0.5 percent to 8.9015 per euro and jumped 0.7 percent to 6.5865 per dollar. An index measuring consumer confidence in November rose to 104.9, compared with a median forecast of 102 in a Bloomberg survey of analysts. A separate index of manufacturing confidence climbed to 105.8, compared with a 100.6 estimate in another Bloomberg survey.

Novartis AG climbed as much as 2.6 percent after proposing a share buyback and saying it will enter new business segments. Whitbread Plc and Daily Mail & General Trust Plc gained more than 3.3 percent after banks raised their stock ratings.

Rhoen-Klinikum AG fell 2.4 percent after saying its second-biggest shareholder sued to block the sale of 43 clinics to Fresenius SE’s Helios unit. TUI Travel Plc and Eurazeo SA lost more than 4.5 percent after investors sold shares.

S&P 500 futures expiring next month advanced less than 0.1 percent. The index rose 0.8 percent yesterday, its biggest advance in a week. Gap Inc. may move after the biggest U.S. specialty-apparel retailer reaffirmed its full-year earnings (GPS:US) estimates of $2.57 to $2.65 a share yesterday, signaling that the crucial holiday-shopping quarter may fall short of analysts’ estimates.

Copper advanced to $7,069.50 a metric ton. Germany is the third-biggest buyer of copper, after China and the U.S. Nickel rose to $13,488 a ton. West Texas Intermediate oil fell 0.3 percent to $95.13 a barrel after jumping 1.7 percent yesterday.

To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net; Shelley Smith in London at ssmith118@bloomberg.net

To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net


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