Asian stocks gain, euro weakens on ECB bets
Asian shares rose for the first time this week, European equities fluctuated and the euro weakened before an expected loosening of monetary policy by the European Central Bank. New Zealand's bonds jumped after a surprise interest-rate cut.
Japanese exporters led stock gains in Asia, buoyed by a retreat in the yen. The Stoxx Europe 600 Index and U.S. stock index futures were little changed, while crude oil retreated from a three-month high. The won strengthened against all 31 major peers after the South Korea's central bank refrained from lowering borrowing costs at a review, while the euro declined for a third day versus the dollar. New Zealand's twoyear bond yield tumbled by the most since 2011 and gold fell for a third day.
"There's very strong expectations that we're going to see further stimulus from the ECB, and the real question is how strong that stimulus will be," said Chris Green, an Auckland-based strategist at First NZ Capital Group Ltd., a brokerage and wealth management firm. "We're seeing a more supportive environment for risk assets going forward."
The ECB is forecast to ease policy via measures including an interest-rate cut and an expansion of its quantitative easing, according to economists surveyed by Bloomberg. That would add to a wave of global monetary stimulus this year that includes a lowering of Chinese lenders' reserve requirements and Japan's introduction of a negative interest rate. The International Monetary Fund said Tuesday that volatile financial markets and low commodity prices were heightening risks for the global economy.
Traders are reining in bets on monetary tightening in the U.S., with Fed funds futures indicating a 4 percent chance the Federal Reserve will increase interest rates at a policy meeting next week, down from 10 percent at the start of this month. The Bank of Japan will also review policy next week and Governor Haruhiko Kuroda said Thursday there's scope for more easing if needed. Chinese inflation data showed consumer prices rose 2.3 percent from a year earlier in February, less than the official 3 percent target. The Stoxx Europe 600 Index fell less than 0.1 percent as of 8:09 a.m. London time. Linde AG, the region's secondbiggest gas supplier, gained 0.5 percent after reporting fourth-quarter profit. Carrefour SA, France's largest retailer, dropped 1 percent after the company announced earnings that matched analyst estimates.
Germany's exports declined 0.5 percent in January from the previous month and the trade surplus narrowed more economists forecast, according to figures released on Thursday. France reported a better-thanexpected pickup in industrial output for the same month.
The MSCI Asia Pacific Index rose 0.4 percent. New Zealand's S&P/NZX 50 Index advanced 0.8 percent to a record, while benchmarks declined in China and India. Japan's Topix Index gained 1.5 percent.
"There are expectations for easing in Europe," said Koichi Kurose, Tokyo-based chief market strategist at Resona Bank Ltd. "If there's nothing, it's going to be a big negative surprise."
Toyota Motor Corp., the world's largest automaker, rallied 3 percent in Tokyo. Kansai Electric Power Co., Japan's secondlargest power utility, slid as much as 17 percent after a court ordered it to shut down two nuclear reactors due to safety concerns. Daewoo Shipbuilding & Marine Engineering Co., the world's second-largest shipbuilder, climbed more than 5 percent in Seoul after forecasting an operating profit for this quarter.
The euro weakened 0.3 percent to $1.0972. It's dropped almost 3 percent in the past month, making it the worst performer among major currencies. Economists forecast the monetary authority will on Thursday cut its deposit rate from minus 0.3 percent and step up a 60 billion-euro ($66 billion) monthly bond-buying program. The New Zealand dollar was little changed, after sliding as much as 0.5 percent. The nation's central bank lowered its benchmark interest rate a quarter of a percentage point to a record 2.25 percent and said further easing may be needed owing to a worsening outlook for the global economy. The change was forecast by just two of 17 economists surveyed by Bloomberg.
The won strengthened 1.1 percent versus the dollar, trimming this year's loss to 2.6 percent. The Bank of Korea's decision to leave interest rates unchanged on Thursday was forecast by 11 of 18 economists in a Bloomberg survey. The other seven predicted a quarter of a percentage point reduction.