Stocks gain with commodities on U.S. budget as Treasuries fall

Thirty-year Treasury yields climbed to a three-month high.

Krona Rallies

Sweden’s krona strengthened 0.3 percent against the euro and 0.8 percent against the dollar after the Riksbank signaled it will not cut interest rates in 2013 after lowering its benchmark rate to 1 percent from 1.25 percent. The euro gained 0.5 percent to $1.3226, the strongest level since May.

Spanish government bonds rose as the nation sold 3.52 billion euros of bills, meeting the maximum target of 3.5 billion euros that the Treasury set for its last debt sale of the year. Spain’s two-year note yields fell four basis points to 2.86 percent, while its 10-year rate declined 13 basis points to 5.30 percent.

U.K. 10-year gilt yields rose for an eighth day, the longest streak of increases since February 2011, as the Office for National Statistics said inflation held at the highest since May last month.

The cost of insuring corporate debt dropped to the lowest since March, with the Markit iTraxx Europe index of credit- default swaps linked to 125 investment grade companies falling three basis points to 111 basis points.

Energy Gains

Oil rose for a third day, with futures advancing 0.8 percent to $87.93 a barrel in New York. An Energy Department report tomorrow may show crude supplies shrank last week while fuel stockpiles climbed, according to a Bloomberg News survey. Crude fell 11 percent in 2012.

Gasoline advanced 1.4 percent to $2.6909 a gallon. U.S. stockpiles rose 1.9 million barrels, or 0.9 percent, to 219 million in the seven days ended Dec. 14, the highest inventory since March 30, according to the median of seven analyst estimates before an Energy Department report tomorrow. Regular gasoline at the pump, averaged nationwide, fell to the lowest price in a year at $3.254 a gallon, according to Energy Department data.

Japan’s Nikkei 225 Stock Average advanced 1 percent today. The gauge has climbed 10 percent in the past month on speculation the Liberal Democratic Party, which returned to power in last weekend’s elections, will spend more to boost the economy and pressure for more bond purchases by the central bank, which meets tomorrow. Shares of Nomura Holdings Inc., Japan’s biggest brokerage, jumped 6.4 percent today.

The MSCI Emerging Markets Index rose 0.6 percent, as benchmark indexes in the Czech Republic, Argentina, Mexico and Brazil surged more than 1.1 percent. The developing-markets gauge has gained 14 percent this year.

Bloomberg News

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