Europe Index Futures Track Asian Gains; Yen, Ruble Rise

(Bloomberg) — Asian stocks and European equity-index futures climbed with the ruble after a ceasefire deal in Ukraine and signs of compromise on Greece’s debt negotiations. The yen held gains on bets that the Bank of Japan won’t add stimulus and the dollar was weaker against most peers.

The MSCI Asia Pacific Index added 1 percent by 7:14 a.m. in London, led by mining and energy shares. Euro Stoxx 50 Index futures increased 0.5 percent and Standard & Poor’s 500 Index contracts were little changed after the U.S. gauge came within three points of a record. Russia’s ruble strengthened 0.5 percent. The yen gained 0.2 percent versus the dollar and Japanese bond yields climbed. Gold rose a second day and oil in New York and London erased weekly declines.

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Global equities have been whipsawed this week as uncertainty over the twin crises in Greece and Ukraine collided with U.S. economic reports that have muddied the outlook for when the Federal Reserve will increase interest rates. Jeroen Dijsselbloem, head of the eurogroup of Greece’s creditors, said the weekend will be used to find common ground and that a solution to the standoff will be “very difficult.” China may release lending data while a U.S. consumer sentiment report is due.

“Currency, commodity, equity and most other financial markets will continue to experience extremely high volatility this year with developments in the global economic situation,” said Win Udomrachtavanich, the Bangkok-based chief executive officer of One Asset Management Co., which manages about $ 3 billion of assets. “The Ukraine agreement is positive for investors but reaction will be short lived as the biggest concern to investors is Greece. Investors will closely watch the talks this weekend.”

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‘Viable Solution’

Germany won’t insist that all elements of Greece’s current aid program continue, said two officials in Berlin. Alexis Tsipras, head of the anti-austerity government in Athens, expressed confidence that a “mutually viable solution” will be found.

“It’s going to take time and don’t get your hopes up yet,” Dijsselbloem said.

A measure of 50-day historic volatility in the MSCI All Country World Index rose to its highest since August 2013 yesterday. The index, which has fallen four out of seven weeks this year, is heading for its highest close since Nov. 28.

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Material and energy companies advanced the most among the 10 index groups on the MSCI Asia Pacific Index today. BHP Billiton Ltd., the world’s biggest mining company and Australia’s No. 1 oil producer, surged 4.8 percent in Sydney, while Rio Tinto Group jumped 6.5 percent after announcing a share buyback. Both companies’ shares surged in London yesterday.

Aussie Stocks

Australia’s benchmark stock gauge jumped 2.3 percent, the most since Dec. 19, to finish at the highest since May 2008. Australia’s dollar strengthened 0.5 percent to 77.72 U.S. cents as the country’s central bank governor said there are limits to what can be accomplished with monetary policy.

Hong Kong’s Hang Seng Index advanced 1 percent and a gauge of Chinese companies listed in the city added 0.9 percent. The Shanghai Composite Index climbed 1 percent.

The Bloomberg Dollar Spot Index fell for a second day after its biggest drop since September 2013 yesterday. The U.S. currency was weaker against 13 of 16 major peers monitored by Bloomberg. The euro gained 0.2 percent to $ 1.1423 and the U.K. pound strengthened 0.2 percent to $ 1.5408.

The yen traded at 118.87 per dollar after jumping 1.1 percent on Thursday after people familiar with Bank of Japan discussions said policy makers are concerned that any further stimulus could prove counterproductive right now.

Japan Tobacco

The yield on Japan’s 10-year bond jumped two basis points to 0.42 percent today, more than twice the record low of 0.195 percent on Jan. 20. It earlier rose to 0.43 percent, the highest level since Dec. 9.

Japan’s Topix index traded near a seven-year closing high struck yesterday. Japan Tobacco Inc. was among the gauge’s biggest supports, with the biggest foreign seller of cigarettes in Russia climbing 1.9 percent after the signing of a plan for quelling the conflict in eastern Ukraine.

Russia’s ruble strengthened to 64.89 per dollar. The accord will come into force Feb. 15, Russian President Vladimir Putin told reporters in Minsk, Belarus Thursday, after talks with French, German and Ukrainian leaders. The International Monetary Fund also pledged to extend the former Soviet republic’s bailout package, paving the way for Ukraine to start debt restructuring talks with creditors.

The Bloomberg Commodity Index added 0.8 percent today after jumping 1.4 percent yesterday. The gauge of 22 exchange-traded futures on physical commodities hit its lowest level since 2002 on Jan. 29 amid concern that China’s slowing economy will crimp demand as the rising dollar puts downward pressure on prices. That’s also sent the Baltic Dry Index of commodity-shipping rates to record lows this week.

Gold, Oil

Gold for immediate delivery added 0.7 percent to $ 1,230.23 an ounce today, while silver climbed 0.9 percent to $ 16.9984 an ounce. Nickel led base metals higher, rising 0.8 percent in its first advance this week. Copper in London rose for a third day, poised for the biggest two-week gain in more than seven months.

West Texas Intermediate for March delivery was at $ 52.03 a barrel in electronic trading on the New York Mercantile Exchange. The contract climbed $ 2.37 to $ 51.21 on Thursday. Brent, the benchmark contract for more than half the world’s oil, advanced 1.7 percent to $ 60.32 a barrel.

Apache Corp. is cutting the number of oil-drilling rigs by 70 percent while Total SA joins companies including BP Plc and Royal Dutch Shell Plc in reducing spending. Crude will rebound in the second half of this year as low prices slow supply growth and stimulate demand, while the potential for OPEC to support the market “should not be ignored,” according to JPMorgan Chase & Co.

To contact the reporters on this story: Nick Gentle in Hong Kong at ngentle2@bloomberg.net; Anuchit Nguyen in Bangkok at anguyen@bloomberg.net

To contact the editors responsible for this story: Nick Gentle at ngentle2@bloomberg.net James Poole

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