Stocks Rise With U.S. Futures on Stimulus Bets; Oil Falls

(Bloomberg) — Stocks rose around the world and the dollar strengthened after China’s central bank said the government can do more to support growth. Oil fell a second day as Iran and six world powers intensified efforts to reach a nuclear accord.

The Stoxx Europe 600 Index climbed 0.7 percent, and the MSCI Emerging Markets Index added 0.9 percent by 10:29 a.m. in London. Standard & Poor’s 500 Index futures rose 0.7 percent. The Bloomberg Dollar Spot Index increased 0.3 percent, advancing for a third day. U.S. crude oil fell 1.5 percent.

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China central bank chief Zhou Xiaochuan said that the nation’s growth rate has tumbled “a bit” too much, and that policy makers have scope to respond, underscoring forecasts for further monetary easing in the world’s second-largest economy. Talks on Iran’s nuclear program resume Monday amid speculation a deal to ease sanctions may mean a resumption of oil shipments, further swelling global supply. Reports on personal spending and income are due in the U.S. before payrolls data on Friday.

“China’s move is good for the rest of the region and is broadly equity market-positive,” said said Tim Condon, Singapore-based head of Asian research at ING Groep NV. “There’s still an event risk in Iran. If the talks blow off and both sides go away angry, it could have negative repercussions on the markets. I think there’s more downside risk than upside even if they come out really well.”

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China has room to act with both interest rates and “quantitative” measures, the People’s Bank of China’s Zhou said in remarks at the Boao Forum for Asia, an annual conference on the southern Chinese island of Hainan. Analysts surveyed by Bloomberg News expect the PBOC will lower both benchmark lending rates and banks’ required reserve ratios, adding to cuts made in recent months.

Stocks Gain

The Stoxx 600 rose after its worst week of the year, with automakers leading the rally. The index has advanced 17 percent this quarter, the most since 2009.

S&P 500 E-mini futures expiring in June climbed after the index posted its biggest weekly drop since the end of January. The gauge has gained 0.1 percent in the first three months of the year, heading for a ninth quarterly increase.

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The MSCI Emerging Markets Index rose the most in one week, heading for the first quarterly rally since June. The Shanghai Composite Index jumped to a seven-year high, capping a 17 percent gain so far in 2015.

Greece’s ASE Index fell 1.1 percent. Prime Minister Alexis Tsipras will update lawmakers Monday on talks with creditors held over the weekend in Brussels. The discussions begin at 8 p.m. Athens time.

Oil Falls

West Texas Intermediate crude fell to $ 48.13 a barrel after a 5 percent rout on Friday trimmed its weekly gain to 6.9 percent. Brent oil lost 0.6 percent to $ 56.04 a barrel Monday following last week’s 2 percent gain.

Oil fell almost 50 percent last year as the Organization of Petroleum Exporting Countries resisted calls to cut output to maintain market share amid surging U.S. supply. Iran, the fifth biggest producer of the group, could increase exports by 1 million barrels a day if international sanctions were lifted, Oil Minister Bijan Namdar Zanganeh said March 16.

Gold declined 0.8 percent to $ 1,189.12 an ounce after halting its longest run of daily gains since August 2012 on Friday.

The dollar climbed versus 14 of its 16 major counterparts, rising most against the yen and the Australian dollar. Bloomberg’s dollar index, which tracks the greenback against 10 major peers was set for a ninth straight monthly gain.

The Aussie dollar dropped for a fifth straight day, declining 0.8 percent to 76.94 U.S. cents, while New Zealand’s currency slipped 0.5 percent to 75.28 U.S. cents.

Euro Weakens

The euro weakened 0.3 percent to $ 1.0860 after gaining 0.6 percent last week. Hedge funds and other large speculators pushed net bearish positions on the euro to a record-high in the week to March 24. They rose to 220,963 contracts, up from 193,774 in the previous period, according to data from the Washington-based Commodity Futures Trading Commission.

Switzerland’s franc had the biggest gain among major currencies versus the dollar this quarter, rising 3.1 percent. Brazil’s real had the biggest drop, sliding 18 percent.

A gauge of emerging-market currencies slid for a fourth day, poised for a third quarterly loss.

German government bonds rose, pushing the 10-year yield two basis points lower to 0.19 percent. Rates on Italian securities of similar maturity dropped one basis point to 1.35 percent.

Treasuries were little changed, with the 10-year note yield at 1.97 percent.

Fed Chair Janet Yellen said Friday that she expects U.S. rates to be raised this year and that subsequent increases will be gradual without following a predictable path. Gross domestic product in the U.S. expanded 2.2 percent in the fourth quarter on an annualized basis, below the 2.4 percent growth predicted by economists.

Reports Monday may show personal incomes rose 0.3 percent in February, according to economists surveyed by Bloomberg, while spending probably advanced by 0.2 percent after dropping 0.2 percent in January.

To contact the reporters on this story: Nick Gentle in Hong Kong at ngentle2@bloomberg.net; Kyoungwha Kim in Hong Kong at kkim19@bloomberg.net

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

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