Stocks trim gain, U.S. bonds reverse losses; commodities advance

German Outlook

German bunds erased gains after the U.S. jobless claims report, pushing the yield one basis points higher to 1.50 percent. Germany’s leading economic forecasters cut the country’s outlook for growth next year to 1 percent, half the rate of an estimate on April 19. Europe’s biggest economy is beginning to be hit by the debt crisis, said the group that includes Munich’s Ifo institute in its 86-page report.

The euro strengthened 0.4 percent to $1.2929 after weakening for three days. Australia’s dollar rallied for a fourth day, climbing 0.3 percent to $1.0265. The rand extended gains against the dollar amid signs labor unrest that shut gold and platinum mines is easing. The currency has strengthened 2.6 percent in three trading sessions.

Corn Supplies

Corn jumped 5 percent to lead gains in 13 of 24 commodities in the S&P GSCI Index after a government report showed global inventories will drop more than expected as the worst U.S. drought in more than 50 years cuts output by the most since 1996.

Worldwide inventories on Oct. 1 will be 117.27 million metric tons, down from 123.95 million predicted a month ago and 131.54 million estimated this year, the U.S. Department of Agriculture said today. Reserves as a percent of consumption will fall to 13.7 percent, the lowest since 1974, USDA data show. Stockpiles in the U.S., the largest grower and exporter, will fall 37 percent to 15.73 million tons, from last year.

Oil in New York climbed 0.9 percent to $92.07 a barrel amid lingering concern tensions between Syria and Turkey will disrupt supplies from the Middle East.

The MSCI Emerging Markets Index added 0.4 percent, the first gain in four days, as benchmark gauges in Turkey, Hungary, Brazil and South Africa climbed at least 1 percent.

South Korea’s KOSPI fell 0.8 percent to its lowest level since Sept. 11, as the country’s central bank lowered the benchmark seven-day repurchase rate to 2.75 percent from 3 percent. The Bank of Korea slashed its 2012 economic growth outlook to 2.4 percent from an earlier estimate of 3 percent. Taiwan’s benchmark stock gauge slumped 1.9 percent, falling for a third day.

Bloomberg News

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