Wednesday, 01 July, 2015
Europe Stocks Climb While German Bunds Fall on Greece; Oil Drops
(Bloomberg) — European stocks rose with U.S. equity-index futures as Greek Prime Minister Alexis Tsipras signaled he was ready to compromise to end a standoff over a bailout. German bunds and Treasuries declined, while oil dropped amid signs a global glut will persist.
The Stoxx Europe 600 Index added 1.7 percent by 7 a.m. in New York, while Standard & Poor’s 500 Index futures advanced 0.8 percent following the index’s first three-month drop in 10 quarters. The yield on 10-year bunds rose five basis points to 0.82 percent and the rate on Treasuries jumped four basis points to 2.40 percent. The euro slipped 0.3 percent to $1.1115. Oil in New York dropped 1.4 percent to $58.63 a barrel.
More than $1 trillion has been erased from the value of global equities this week amid an impasse over bailout funding for Greece. Tsipras offered to accept proposals from the nation’s creditors, while sticking points remain on pensions and tax discounts to Greek islands, according to a letter dated June 30 to his creditors. The country missed a deadline for repaying $1.7 billion to the International Monetary Fund.
“It seems they are on their way towards some type of a deal,” said Otto Waser, chief investment officer at R&A Research & Asset Management AG in Zurich. “It’s a first step and if they decide there is room for negotiation the markets will stay up. Ultimately, Greece will stay in the euro.”
Stocks fell earlier this week after Tsipras’s surprise call for a July 5 referendum on the terms of any bailout. Euro area finance ministers will weigh the bid from Tsipras and European Central Bank policy makers are set to discuss whether to maintain their emergency lifeline.
More than 15 shares advanced for every one that declined in the Stoxx 600, with trading volumes 42 percent higher than the 30-day average, according to data compiled by Bloomberg. The gauge slumped 4 percent last quarter, the most in three years. Germany’s DAX Index climbed 2 percent today, after being the worst performer among developed markets in the past three months. Markets in Greece are closed this week.
“The risk appetite is back given that the Greece default on its IMF payment did not trigger a general panic and that a bailout agreement may well be back on the table,” Ipek Ozkardeskaya, an analyst at London Capital Group, said by e-mail.
The Global X FTSE Greece 20 ETF added 7.9 percent in early New York trading after rebounding 6 percent on Tuesday. American depositary receipts of National Bank of Greece SA jumped 16 percent following a 7.9 percent gain.
Airbus Group SE rose 4 percent after winning an order from China for as many as 75 A330 jets worth $18 billion at list prices. Serco Group Plc jumped 10 percent after saying trading was better than anticipated. Tullow Oil Plc advanced 1.1 percent after it raised this year’s production forecast.
S&P 500 E-mini futures expiring in September rose after the index climbed for the first time in five days. It fell 0.2 percent last quarter for the first quarterly drop since 2012.
Nike Inc. climbed 0.9 percent in Germany after its Chief Executive Officer Mark Parker was recommended to become the company’s next chairman. Peabody Energy Corp. dropped 2.3 percent in New York after the largest U.S. coal producer said quarterly profit will be less than forecast.
A private report will probably show employers added more jobs in June, according to a Bloomberg survey. The Labor Department releases its monthly payrolls data on Thursday. U.S. markets are closed for a holiday on Friday.
The dollar rose versus all but one of its 16 major peers, with the Bloomberg Dollar Index gaining 0.3 percent. Switzerland’s franc was the day’s biggest loser, depreciating 0.3 percent to 1.04524 per euro.
Italy’s 10-year bond yield declined nine basis points to 2.25 percent and Spain’s dropped nine basis points to 2.21 percent. Portugal’s bonds rose, with yield falling 14 basis points to 2.86 percent. It’s still up from 2.72 percent on June 26.
The MSCI Emerging Markets Index rose for a second day, adding 0.4 percent as benchmark gauges in India, Malaysia and South Korea climbed more than 0.7 percent. Hong Kong markets were closed for a holiday.
The FTSE Bursa Malaysia KLCI jumped 1.8 percent and the ringgit posted its steepest increase since June 18. Fitch Ratings raised the nation’s outlook to stable from negative, saying finances are improving and growth remains steady, according to a statement Tuesday. Fitch warned in March that there was more than a 50 percent chance of a downgrade.
The Shanghai Composite Index fell 5.2 percent after a two factory gauges missed estimates showed the economy remained sluggish and margin debt slumped for a seventh day. The In the U.S., a private report will probably show employers added more jobs in June, according to a Bloomberg survey.
Brent crude futures slid 1.3 percent in London. Production from the Organization of Petroleum Exporting Countries accelerated last month to the highest level since August 2012 as Iraq pumped at a record, a Bloomberg survey showed.
U.S. crude inventories expanded by 1.9 million barrels last week, the industry-funded American Petroleum Institute was said to have reported Tuesday.
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