European stocks rallied with crude oil and gold, while the dollar strengthened to a two-week high versus the yen before data on the U.S. economy. The ruble gained against the greenback for a third day.
The Stoxx Europe 600 Index increased 0.1 percent by 8:06 a.m. in London, rising for a sixth day to head for its longest winning streak since April. Futures on the Standard & Poor’s 500 Index were little changed, while a gauge of Asian shares lost 0.7 percent as commodity stocks declined. The dollar climbed for a fifth day against the yen as the Bloomberg Dollar Spot Index held near a five-year high. The ruble strengthened 3.1 percent as oil rose in New York and London. Gold rallied 0.5 percent.
A report today may show the U.S. economy expanded more than previously estimated last quarter, amid a slew of data from goods orders to home sales. A final reading on U.K. gross domestic product is scheduled after a report on economic growth in France matched estimates. Greek lawmakers will vote on the prime minister’s pick for president for a second time. The U.S. publishes oil inventories tomorrow.
“As we get into the period where the Federal Reserve starts to actually increase interest rates, we’re going to see the dollar strengthen quite significantly against the other Group of Four currencies,” Kelvin Tay, a money manager at UBS Wealth Management in Singapore, said in an interview on Bloomberg Television. “The U.S. dollar is going to be quite a strong currency in 2015.”
The benchmark U.K. share gauge rallied 0.2 percent, while an index of German equities was little changed. Greece’s ASE Index is yet to open. Intraday volatility on the measure surged last week after Prime Minister Antonis Samaras failed to win two-thirds support in parliament for his candidate to succeed President Karolos Papoulias. A second of three potential ballots is scheduled for today at noon.
Oil Rises
West Texas Intermediate crude rose 0.8 percent to $55.85 a barrel, after falling 3.3 percent yesterday. Prices are down 43 percent this year. Brent crude added 0.4 percent to $60.37 a barrel after slipping 2.1 percent last session. The ruble strengthened 2.9 percent to 54.24 a dollar.
Oil inventories in the U.S., the world’s largest consumer, probably dropped for a second week through Dec. 19, a Bloomberg News survey of energy analysts showed before data tomorrow. Iraq plans to boost production to 4 million barrels a day next year as the Organization of Petroleum Exporting Countries refuses to cede market position, said Oil Minister Adel Abdul Mahdi.
Gold, Stocks
Gold gained 0.5 percent to $1,181.88 an ounce on the spot market after sinking as much as 2.1 percent yesterday to $1,170.76, the lowest intraday level since Dec. 1. The Bloomberg Commodity Index dropped 1.5 percent last session, closing at its lowest level since 2009, and is headed for a decline of 15 percent in 2014, the most since 2008.
Energy producers and materials companies led declines among Asian stocks today, with Australia’s S&P/ASX 200 Index falling 1.1 percent, the most since Dec. 9. BHP Billiton Ltd., the world’s biggest mining company, sank 3.5 percent after surging almost 9 percent over the past four days. Iron ore, Australia’s biggest export, lost 1.8 percent yesterday in Qingdao, China, to the lowest level since June 2009. The Australian dollar weakened 0.2 percent to 81.16 U.S. cents today.
“The commodity share rally was always expected to be short-lived,” said Ryan Huang, a market strategist at IG Ltd. in Singapore. “It was not sustainable with fundamentals largely unchanged. Investors are taking the rally as an opportunity to cash out and sell.”
Shanghai Slump
The Shanghai Composite Index slumped 3 percent, paring its surge over the past month to 20 percent. Hong Kong’s Hang Seng Index (HSI) fell 0.3 percent and the Hang Seng China Enterprises Index, which tracks mainland Chinese shares listed in the city, lost 0.6 percent. Japan’s markets were shut for a holiday.
Economists surveyed by Bloomberg predict annualized growth in the U.S. economy will be revised up to 4.3 percent for last quarter, from a previous estimate of 3.9 percent. Orders for durable goods expanded 3 percent in November on the month, compared with a revised 0.3 percent increase in October, according to a separate survey before a report due today.
The yen dropped as much as 0.1 percent today to 120.18 per dollar, its weakest level since Dec. 9. The currency capped a fourth day of losses last session, its longest slump in a month.
The Bloomberg Dollar Spot Index yesterday posted the highest close since March 2009 as the S&P 500 added 0.4 percent to an all-time high of 2,078.54. Gains in Intel Corp. and International Business Machines Corp. led the Dow Jones Industrial Average (INDU) up 0.9 percent, to a record 17,959.44.
Source: Bloomberg