Stocks Gain With Dollar Before Jobs Data as Gold Drops

Frankfurt (Oct 3)  Stocks rose around the world, with the European benchmark index recovering from its biggest loss in 15 months, and the dollar strengthened before a U.S. jobs report. Most government bonds retreated and gold was close to erasing this year’s advance.

The MSCI All-Country World Index ended a four-day slide as the Stoxx Europe 600 Index gained 0.6 percent at 7:50 a.m. in New York, and Standard & Poor’s 500 Index futures (SPX) added 0.5 percent. The dollar rose versus all but one of its 16 major peers. Yields on 10-year Treasuries climbed to 2.44 percent as those on similar-maturity German bunds rose three basis points to 0.93 percent and those on U.K. gilts increased four basis points to 2.37 percent. Gold fell 0.6 percent.

Investors are awaiting a U.S. jobs report to assess the strength of the world’s largest economy. European shares rebounded after slumping yesterday on concern the central bank’s asset-buying plan won’t be enough to revive growth and avoid deflation. France’s Christian Noyer joined European Central Bank policy makers from Germany and Austria in opposing a program to buy asset-backed securities, according to two euro-area officials. In Hong Kong, a city official agreed to talks to diffuse a week-long pro-democracy protest.

 
“People will be poring over U.S. data today to see if the economy is strong enough for the Fed to start raising interest rates,” Andrea Williams, who helps oversee 50 billion pounds ($80 billion) at Royal London Asset Management, said by phone from London. “It’s a bit of a bounce for European markets from yesterday’s selloff. The lack of new news from ECB yesterday disappointed markets. The ECB is still there in the background, ready to do more if needed.”

Weekly Drop

The MSCI All-Country World Index trimmed its weekly decline to 2.3 percent after closing at its lowest level since April.

Futures on the S&P 500 expiring in December rose after the index closed little changed, near its lowest level since Aug. 12. It’s fallen 1.9 percent this week, a second consecutive decline for the first time since May.

U.S. employers hired 215,000 workers in September, according to the median economist forecast in a Bloomberg News survey. The Labor Department report is due at 8:30 a.m. in Washington. Payrolls rose by a worse-than-estimated 142,000 people in the previous month, the first increase of less than 200,000 since January. Data from the Roseland, New Jersey-based ADP Research Institute showed this week that U.S. companies employed more workers last month than predicted.

Dollar Strengthens

The Bloomberg Dollar Spot Index, up 0.3 percent today, headed for a seventh weekly gain, its longest run since June 2010, as improving U.S. data adds to speculation the Federal Reserve will raise interest rates next year.

The U.S. currency has jumped 6.8 percent in the past three months, the best performer of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen weakened 0.5 percent and the euro declined 1.8 percent.

The dollar rose 0.5 percent to 108.95 yen today after touching 110.09 yen on Oct. 1, the strongest level since 2008. It gained 0.4 percent to $1.2622 per euro.

In Europe, the Stoxx 600 rebounded from its lowest level since Aug. 15, trimming its weekly drop to 2.5 percent. Eighteen of its 19 industry groups increased today, with travel and leisure shares climbing the most, as EasyJet Plc advanced 6 percent after saying full-year pretax profit jumped at least 20 percent. Banks posted the second-biggest gain as a group after a 3.3 percent slump yesterday.

Iliad SA fell 1.5 percent after people familiar with the matter said it plans to bid for a bigger stake in Deutsche Telekom AG’s U.S. unit than it originally sought.

Yen Drops

Bonds in Europe were mostly lower as investors weighed the prospects for additional central-bank easing measures following yesterday’s interest-rate decision. France’s 10-year yield increased three basis points to 1.28 percent and the rate on similar-maturity Dutch debt climbed to 1.08 percent.

The average yield on bonds sold by companies in Europe’s peripheral countries fell to a record 1.19 percent this week, while those in the region’s core countries dropped to an all-time low of 1.24 percent, according to Bank of America Merrill Lynch indexes. The yield difference widened to 0.06 percentage point yesterday, the biggest since September 2009.

The MSCI Emerging Markets Index climbed 0.4 percent, halting a six-day slump that sent the measure to its most oversold level since June 2013 and valuations to the lowest since May 13. The gauge has fallen 2.7 percent this week, a fourth straight decline and the longest stretch since June 2013.

Source: Bloomberg