The dollar strengthened to a seven-year high against the yen and U.S. equity-index futures rose while gold declined. European bonds gained and stocks pared losses.
The dollar appreciated 0.5% to 116.35 yen at 10:45 a.m. in London. Gold slid 0.7%. S&P 500 futures rose 0.2% while Stoxx Europe 600 Index slipped 0.1%. The yield on Italy's 10-year bond fell three basis points. The ruble headed for its 10th weekly decline and the cost of protecting Russian debt against default climbed to a three-year high. Hong Kong stock-index futures gained after China said it will waive capital gains taxes for foreign investors and mainland individuals using the Shanghai-Hong Kong bourse link.
International investors said the world economy is in its worst shape in two years and the danger of deflation rising, according to a Bloomberg Global Poll this week. Data Friday showed a rebound in Germany and France kept the euro-area economy growing in the third quarter as Group of 20 leaders prepared for this weekend's summit in Australia.
“The recovery is continuing, but it is a very weak recovery, which will remain slow,” said Andreas Scheuerle, an economist at Dekabank in Frankfurt. “The eurozone problems can't be solved in one quarter, they are a long-term problems.”
The dollar climbed against 12 of its 16 major peers. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 of its most-traded peers, rose 0.2%.
EUROPEAN STOCKS
Schibsted ASA rallied the most since 2000 as the Norwegian media company announced a deal for joint ventures in online classifieds with Naspers Ltd., Telenor ASA and Singapore Press Holdings Ltd.
SBM Offshore NV declined the most in three months after Brazilian authorities said the company won't be invited to bid for contracts from the state-controlled Petroleo Brasileiro SA until a bribery investigation is completed.
Abengoa SA plunged 34% to an almost one-year low amid concern that orders are slowing for the Spanish energy and environment company.
The MSCI Emerging Markets Index lost 0.3%, trimming this week's gain to 0.2%.
The ruble weakened 1.1% to 47.32, extending its decline for the five-day period to 1.4%. Russia's currency has dropped for 10 weeks, the longest slump since July 2005.
Credit-default swaps insuring Russian government debt rose 7.5 basis points to 289 basis points, the highest since November 2011, according to data compiled by Bloomberg. The contracts have increased for all but one of the past 11 days, the data show.
Futures on the Hang Seng China Enterprises Index rose 1.2% after the official close of Hong Kong's stock exchange, and contracts on the Hang Seng Index climbed 0.8%.
CHINA CONNECT
Chinese individuals who buy Hong Kong equities through the link get a three-year exemption, while mainland companies using the connect will be charged tax, the Ministry of Finance said in a statement Friday, clarifying its rules three days before the program's debut.
WTI for December delivery reversed a loss, gaining 16 cents, or 0.2%, to $74.37 a barrel in electronic trading on the New York Mercantile Exchange. The contract earlier slid as much as 96 cents, or 1.29%, to $73.25 a barrel to the lowest since September 2010. Front-month prices are down for a seventh week, the longest stretch of decreases since 1986.
Brent for January settlement rose 0.5% to $77.91 a barrel after falling to as low as $76.76 on the London-based ICE Futures Europe exchange. The December contract expired yesterday at $77.92, the lowest close for a front month contract since September 2010.
