European stocks rose to a two-month high and Asian shares advanced on speculation central banks will ease monetary policy to spur growth. U.S. equities were little changed before data on factory orders, while oil led commodities higher and the yen weakened.
The Stoxx Europe 600 Index added 0.6 percent at 9:30 a.m. in New York and Standard & Poor’s 500 Index was little changed near the 1,361 level. The MSCI Asia Pacific Index gained 0.9 percent. Barclays Plc rose 2 percent after Robert Diamond resigned as chief executive officer, while the cost of insuring against a default by the bank increased. The yen fell against its 16 major peers, and the 10-year German bund declined. Oil jumped almost 4 percent and corn climbed for a third day.
The European Central Bank is forecast by economists to cut interest rates this week to help curb the debt crisis, while a state-owned newspaper in China said the time is ripe for a reduction in banks’ reserve-requirement ratios. Declining employment figures in the U.S. this week may prompt the Federal Reserve to initiate fresh stimulus, BNP Paribas SA said. A report today may show factory orders in the world’s biggest economy stagnating.
“Disappointing economic readings are spurring expectations for more stimulus measures,” said Chung Yun Sik, the Seoul- based chief investment officer for equities at ING Investment Management Korea Ltd., which oversees about $17 billion. “Investors’ focus, at least for now, appears to have shifted away from Europe’s debt woes.”
Trading on U.S. stock markets will end at 1 p.m. today in New York and Treasuries will close at 2 p.m., with exchanges shut tomorrow for the Fourth of July holiday.
The Stoxx 600 rallied to the highest level since May 4 as two shares increased for every one that fell. PSA Peugeot Citroen led gains in automakers, with the shares climbing 2.5 percent after a union official said the company plans to cut its French workforce by as much as 10 percent this year.
Barclays shares advanced for a second day as Diamond succumbed to political pressure to quit after the bank admitted to rigging global interest rates. Credit-default swaps tied to Barclays bonds climbed three basis points to 200, after two days of declines. The Markit iTraxx Financial Index of default swaps on the senior debt of 25 European banks and insurers fell for a third day, dropping seven basis points to a two-month low of 246.
U.S. stocks were little changed after two days of gains in the S&P 500. Microsoft Corp. dropped in pre-market trading as the world’s largest software company said it will write down $6.2 billion of the amount it paid for AQuantive Inc., the Internet-advertising company it bought in 2007. MModal Inc. rose after the provider of medical document processing technology agreed to be bought by a JPMorgan Chase & Co. unit for about $1.1 billion.
Germany’s 10-year bund yield was little changed at 1.52 percent, while yields on 10-year Treasuries increased one basis point to 1.59 percent.
The yen weakened 0.3 percent against the euro and 0.4 percent versus the dollar. Australia’s dollar appreciated 0.5 percent versus the yen after data showed building approvals surged by a record and the central bank left interest rates unchanged.
The S&P GSCI gauge of 24 commodities climbed 2.7 percent to the highest since May. Oil rose to $87.05 a barrel, corn gained 1.6 percent and copper jumped 2.2 percent. Aluminum advanced 2.6 percent after Goldman Sachs Group Inc. said the metal is “attractive at these levels.”
The MSCI Emerging Markets Index advanced 1.4 percent, bound for the highest close since May 11. The Hang Seng China Enterprises Index added 1.4 percent as trading resumed after a yesterday’s holiday. Cutting reserve requirements may become the top choice for the People’s Bank of China to increase liquidity, according to the China Securities Journal, which is published by the official Xinhua News Agency.
Russia’s Micex Index advanced 2.1 percent. Turkey’s ISE National 100 Index jumped 1 percent after the inflation rate rose less than analysts estimated.