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European stock-index futures gained and Asian equities rebounded after entering a correction, before a report forecast to show U.S. industrial production expanded.
The yen and South Korean won strengthened, while metals climbed.
Euro Stoxx 50 Index futures rose 0.4 percent at 7:35 a.m.
in London, indicating the regional benchmark may snap four days of losses. The MSCI Asia Pacific Index gained 1.2 percent, while Standard & Poor’s 500 Index futures slid 0.1 percent after the gauge rallied 1.5 percent yesterday. The yen advanced against all of its 16 major peers except the won, which climbed 0.8 percent versus the dollar. Copper added 1 percent, while bond risk in Asia fell.
Data today may show U.S. industrial output rose 0.2 percent in May, a day after reports on retail sales and jobless claims beat estimates. The Bank of Japan said the economy has started picking up, while the yen yesterday touched the strongest level since the central bank announced unprecedented easing. MSCI’s Asian index slumped 11 percent though yesterday from its 2013 high on May 20, erasing $1.06 trillion in value.
“You get good data plus reduced fear about a premature rate hike from the U.S. Federal Reserve, and that helped the U.S. share market and that’s helping Japanese and Asian markets today,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has $126 billion under management. “Look at the underlying global growth dynamics and they remain favorable.”
Fed Concern
Today’s data may show U.S. industrial production rose after a 0.5 percent contraction the previous month. Retail sales increased 0.6 percent in May, following a 0.1 percent gain in April, government figures showed. The median forecast of economists surveyed by Bloomberg called for a 0.4 percent advance. Jobless claims dropped by 12,000 to 334,000 last week, lower than the median economist estimate of 346,000.
The MSCI All-Country World Index, the benchmark gauge of global stocks, rose 0.3 percent. It has slumped 4.1 percent from this year’s May 21 peak on speculation the Federal Reserve, which meets next week, may ease stimulus. The Fed may “push back” on market expectations for higher borrowing costs, the Wall Street Journal reported.
Investors pulled $8.5 billion from global equity funds in the week to June 12, Citigroup Inc. said in a report dated today, citing EPFR Global data.
The MSCI Asia Pacific Index, which closed yesterday at the lowest since Dec. 27, is little changed for the week. The MSCI Emerging Markets Index climbed 1.1 percent, set to pare a fifth weekly drop after the gauge sank to a nine-month low yesterday.
Bond Sale
Japan’s Topix added 1.2 percent, snapping a three-day drop.
Australia’s S&P/ASX 200 rose 2 percent, capping its first weekly gain in five weeks. Hong Kong’s Hang Seng Index advanced 0.9 percent. Gauges in Thailand, the Philippines and Indonesia rose more than 3 percent after all three dropped to their lowest levels since at least February. The Shanghai Composite Index was poised for its first gain in nine days.
China’s Finance Ministry failed to sell all of the debt offered at an auction for the first time in 23 months owing to a cash squeeze, according to two traders at finance companies that participate in the sales. The ministry sold 9.53 billion yuan
($1.55 billion) of 273-day bills, less than the 15 billion yuan target, they said.
The yen gained 0.5 percent to 94.93 per dollar. It yesterday touched 93.79, the strongest level since April 4 when the BOJ doubled the monetary base. One-month implied volatility of the dollar-yen currency pair reached 18.91 percent yesterday, the most since March 2011, and was at 16.96 percent today.
The Japanese currency rose 0.6 percent to 126.76 per euro.
South Korea’s won rose the most in eight weeks to 1,125.85 per dollar.
Aussie, Kiwi
Australia’s currency fell 0.5 percent to 95.89 U.S. cents, trimming this week’s gain to 1.4 percent. The New Zealand dollar slid 0.4 percent to 80.66 cents, still poised for a 2.1 percent gain this week. Reserve Bank of New Zealand Governor Graeme Wheeler said yesterday that the nation’s currency is overvalued.
The JPMorgan Global FX Volatility Index rose to 11.43 percent yesterday, the most since June 2012. The gauge has climbed from 7.05 percent in December, which was the lowest since July 2007. Global regulators may start overseeing currency rates in a widening response to benchmark-rate setting scandals that began with revelations on the manipulation of Libor, according to two people familiar with the matter.
Metals, Grains
Copper for delivery in three months on the London Metal Exchange advanced to $7,122.25 a metric ton, paring a second weekly loss, on concern supply may be curbed from Freeport- McMoRan Copper & Gold Inc.’s mine in Indonesia. Zinc, lead and nickel each climbed more than 0.7 percent.
Corn fell 0.4 percent to $5.33 a bushel on the Chicago Board of Trade, set for a second weekly decline, after the U.S.
this week raised its estimate for domestic output. Wheat retreated 0.3 percent to $6.8375 a bushel.
The cost of insuring corporate and sovereign bonds in the Asia-Pacific region against non-payment fell. The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan dropped 10 basis points to 137.5, Royal Bank of Scotland Group Plc prices show. The measure, which had risen 12 basis points this week as of yesterday, is poised for its biggest one-day decline since Sept. 14, according to data provider CMA.
source: Bloomberg
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