Reuters: US Dollar Report: GLOBAL MARKETS-Shares, euro climb on stronger German data

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GLOBAL MARKETS-Shares, euro climb on stronger German data Dec 11th 2012, 15:13 Tue Dec 11, 2012 10:13am EST * European shares rise after ZEW German confidence jump * Wall Street higher in early trading * Fed expected to announce new Treasury securities purchases * Oil prices tick up on Egypt, Syria tensions By Wanfeng Zhou NEW YORK, Dec 11 (Reuters) - U.S. stocks advanced and European shares rallied to an 18-month high on Tuesday after German investor sentiment rose sharply in December and on expectations the Federal Reserve will keep pumping money into the U.S. economy. The euro gained versus the dollar, as investors steered clear of the U.S. currency ahead of the Fed's meeting on Tuesday and Wednesday, while U.S. government bond prices fell. Morale among German analysts and investors improved sharply in December, jumping to 6.9 against expectations of -12.0, fanning hopes that Europe's largest economy will avoid recession this winter. "We've been getting a lot of the beginning of our day from seeing what Europe has been doing and I think that's going to hold true today," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh. The lack of progress in negotiations about the U.S. "fiscal cliff" has kept investors from making aggressive bets in recent weeks, though most expect a deal will eventually be reached. While the pace of talks in Washington to avert impending U.S. tax hikes and spending cuts quickened, senior politicians on both sides cautioned that an agreement on all the outstanding issues remained uncertain. The Dow Jones industrial average gained 61.56 points, or 0.47 percent, to 13,231.44. The Standard & Poor's 500 Index rose 7.13 points, or 0.50 percent, to 1,425.68. The Nasdaq Composite Index added 23.71 points, or 0.79 percent, to 3,010.67. The FTSEurofirst 300 index rose 0.3 percent to 1,138.14 points, having hit its strongest since June 2011. The MSCI global stock index edged up 0.5 percent to 336.51 points. The U.S. central bank is expected to announce a new round of Treasury securities purchases at the end of its meeting on Wednesday, according to a Reuters poll. The program would replace its "Operation Twist" stimulus, which expires at the end of the year. Many economists believe the Fed will announce monthly bond purchases of $45 billion, although some think it could be more. "We anticipate the Fed will announce Treasury purchases and as that depresses yields it will have a negative impact on the dollar and that supports the euro," said Jane Foley, senior currency strategist at Rabobank. The euro rose 0.4 percent to $1.2989, while the dollar was little changed at 82.34 yen. Markets had been rattled on Monday by Italian Prime Minister Mario Monti's announcement he would step down some weeks early. But the upbeat ZEW data helped lift shares and the euro from their gloom. Expectations of more easing drove the dollar index down 0.3 percent, and pushed the Canadian dollar to a two-month high, while the New Zealand dollar hit a nine-month high of $0.8369. Benchmark 10-year Treasury notes were trading 9/32 lower in price to yield 1.65 percent, the highest in over a week and up from 1.63 percent late Monday. Investors were also pushing for price concessions heading into $66 billion of U.S. government debt auctions this week. In the oil market, Brent crude rose 52 cents to $107.85 a barrel after OPEC said its production declined in November, while a weaker dollar and Middle East unrest also supported prices. U.S. crude gained 19 cents to $85.75. Gold was steady near $1,710 an ounce, with more U.S. stimulus expected to support gold's appeal as a hedge against inflation. Link this Share this Digg this Email Reprints

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