European bonds gain as ECB may continue asset purchases

Bonds in Europe gained after a report that the European Central Bank may continue asset purchases for at least nine months after it starts tapering in January. The Stoxx Europe 600 Index climbed, led by steelmakers and miners as most industrial metals gained and crude oil rose back above $51 a barrel.

Central bank officials are considering reducing quantitative easing to 30 billion euros a month from the current pace of 60 billion euros, according to officials familiar with the debate. While the central bank’s governors are split on the need to identify an end date for purchases, a pledge to keep buying bonds until September — with the proviso that it could be extended if needed — may offer grounds for compromise, they said.

U.S. stocks climbed to record highs and Treasuries rallied after a core inflation reading slowed, adding to evidence that economic growth continues apace without stoking price increases. The dollar pared losses.

Excluding food and energy, so-called core prices rose 0.5 percent in September, below an estimate of 0.6 percent. At the same time, a Commerce Department report also released Friday showed U.S. retail sales rose in September by the most in more than two years.

At the end of the week, the S&P 500 Index and the Dow Jones Industrial Average rose 0.1 percent respectively. The Nasdaq Composite Index gained 0.2 percent. All three indexes hit record highs. The Stoxx Europe 600 Index rose 0.3 percent. The MSCI All-Country World Index rose 0.2 percent. Spain’s IBEX Index fell 0.2 percent. The MSCI Emerging Market Index rose 0.5 percent. Japan’s Nikkei 225 rose 1 percent, finishing the week at the highest since 1996.

Germany’s inflation held steady, as initially estimated, in September, final data from Destatis showed Friday. Consumer prices advanced 1.8 percent year-on-year in September, the same rate as seen in August. The rate also matched the estimate published on September 28.