Euro Weakens Versus Yen, Dollar as Unemployment Rises

The euro fell, reversing its biggest gain versus the yen in more than 15 months, as a report showed unemployment in the 17 countries sharing the currency climbed to a record in May.
The common currency weakened against all except one of its 16 most-traded peers after jumping the most against the dollar in eight months on June 29 as regional leaders eased terms on loans to Spanish banks. The European Central Bank will probably lower the key interest rate a quarter-percentage point on July 5, a Bloomberg News survey showed. Mexico’s peso traded near its highest in a month after a presidential election.

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Japanese yen and U.S. dollar notes are arranged for a photograph in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

 

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July 2 (Bloomberg) -- Kathleen Brooks, research director at Forex.com, a unit of online currency trading company Gain Capital Holdings Inc., talks about foreign-exchange markets. She speaks with Guy Johnson on Bloomberg Television's "The Pulse." (Source: Bloomberg)

 

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July 2 (Bloomberg) -- Derek Halpenny, European head of global currency-markets research at Bank of Tokyo-Mitsubishi UFJ Ltd., talks about European Central Bank interest rates and the outlook for the euro and dollar. He speaks with Linzie Janis on Bloomberg Television's "On the Move." (Source: Bloomberg)

“The data backdrop in Europe remains relatively challenging,” Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce in London, said in a telephone interview. “The unemployment number puts some pressure on the ECB and their response in terms of monetary- policy easing against the backdrop of a weak economic environment.”
The euro dropped 0.5 percent to 100.52 yen at 9:50 a.m. New York time after rising 2.2 percent on June 29, the steepest advance on a closing basis since March 2011. It fell 0.5 percent to $1.2599, after jumping 1.8 percent at the end of last week, the most since Oct. 27. The greenback was little changed at 79.78 yen.
The jobless rate in the euro area rose to 11.1 percent in May from 11 percent in April, the European Union’s statistics office in Luxembourg said today. That’s the highest since the data series started in 1995.

Mexican Election

Enrique Pena Nieto, a member of the Institutional Revolutionary Party, claimed victory in Mexico’s election on a pledge to boost economic growth and private investment. The party ruled the nation for more than 70 years until 2000. The peso fluctuated, trading little changed at 13.3615 per dollar after gaining 0.8 percent and falling 0.2 percent. It touched 13.2505, the strongest level since May 8.
Brazil’s real rose 0.8 percent to 1.9941 per dollar as yields on the country’s interest-rate futures contracts fell after economists covering the world’s sixth-largest economy cut their 2012 growth forecasts for an eighth consecutive week.
Australia’s dollar touched an almost two-month high on bets the central bank will leave interest rates on hold tomorrow.
The euro fell versus all of its major peers except the Danish krone. The ECB will lower its main refinancing rate to 0.75 percent at its meeting this week, according to a Bloomberg survey.
“We can’t buy the euro yet,” said Marito Ueda, senior managing director in Tokyo at FX Prime Corp. (8711), a currency-margin company. “The outlook for Europe’s economy is still bleak, and it still remains to be seen what economic measures will be undertaken there.”

Finn Opposition

The euro stayed weaker against the dollar after currency- bloc member Finland said it opposed granting the permanent European Stability Mechanism the ability to purchase bonds on the secondary market, a measure discussed at last week’s summit.
Officials “didn’t reach consensus on the issue,” according to a statement on the Helsinki-based government’s website today. “Finland was among the Members States to oppose bond buying from the secondary market.”
The euro jumped at the end of last week after euro-area leaders dropped the requirement that governments get preferred creditor status on crisis loans to Spain’s blighted banks. Lenders can also be recapitalized directly with European bailout funds rather than being channeled through governments, European Union President Herman Van Rompuy said after the two-day summit that ended June 29.

‘Bearish Case’

“While Friday’s developments have bought some time for the euro, the bearish case for the currency remains very much intact,” Gareth Berry, a foreign-exchange strategist at UBS AG in Singapore, wrote in a note today. UBS has reiterated its three-month target of $1.20 for the euro, Berry wrote.
Japan’s largest manufacturers expect the yen to trade at an average of 78.93 per dollar in the second half of this fiscal year, the Bank of Japan (8301)’s quarterly Tankan report showed today. They forecast 78.24 in a March survey.
Manufacturer sentiment rose to minus 1 in June from negative 4 in March, according to the report. The BOJ is scheduled to hold a two-day policy meeting starting July 11.

‘Pressure Off’

“On the face of it, the data should take some pressure off the BOJ to ease policy next week,” Sue Trinh, a senior currency strategist in Hong Kong at Royal Bank of Canada, wrote in a research note today about the Tankan.
The Reserve Bank of Australia will keep the overnight cash- rate target at 3.5 percent at tomorrow’s policy meeting, according to all 28 economists in a Bloomberg survey.
The Aussie gained 0.2 percent to $1.0257 and reached $1.0278, the strongest since May 4.
New Zealand’s dollar may rise to the highest in more than two months as its short-term momentum has a “bullish” bias, Niall O’Connor, a New York-based technical analyst at JPMorgan Chase & Co., wrote in a research note yesterday, referring to forecasts the currency will continue to appreciate.
The currency, nicknamed the kiwi, faces an “important” test at the level of 80.60 U.S. cents to 80.90, which sits on a downtrend line from the Feb. 29 high, the analyst wrote. Rising above that may take the kiwi toward April highs, O’Connor wrote.

More Pain

The South Pacific nation’s currency jumped as much as 2 percent on June 29 before trading 0.3 percent higher today at 80.38 U.S. cents. It touched 80.51 cents, the highest level since May 3.
Derivatives traders see at least a year of pain for the euro even after the currency surged the most in eight months following the approval by European Union leaders of measures aimed at making it easier for Spain and Italy to obtain aid.
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European Stocks Advance as Investors Eye ECB Decision

European stocks rose as investors bet central banks will add to measures unveiled by the region’s governments to contain the sovereign-debt crisis and data from China and Japan fueled optimism Asia will drive global growth.
Invensys Plc (ISYS) advanced 2.3 percent after a report said China South Locomotive & Rolling Stock Corp. may make an offer. Aviva Plc, the U.K.’s second-biggest insurer, jumped 3.8 percent after it named a new chairman. Rhoen Klinikum AG (RHK) slumped 9 percent after Fresenius SE failed in its 3.1 billion-euro bid to buy the company.

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Aviva Plc, the U.K.’s second-biggest insurer, jumped 3.7 percent after it named a new chairman. Photographer: Chris Ratcliffe/Bloomberg

The Stoxx Europe 600 Index (SXXP) climbed 1 percent to 253.62 at 3:04 p.m. in London. The gauge rallied 1.9 percent last week, trimming its second-quarter decline to 4.6 percent, as the region’s leaders eased repayment rules for Spanish banks and relaxed conditions for possible aid to Italy.
“Investors will focus on the European Central Bank decision this week,” said Guillaume Chaloin, a fund manager at Meeschaert Asset Management in Paris, which oversees $2.5 billion in assets. “There is a rotation toward cyclical stocks, such as oil and technology, with the idea that if we’ve found a solution to the debt problem, there will be less negative impact on industries sensitive to the economy.”
The volume of shares changing hands on Stoxx 600 companies was 30 percent more than the average of the last 30 days, data compiled by Bloomberg showed.
National benchmark indexes advanced in all of the 18 western European markets except Iceland. France’s CAC 40 climbed 1 percent and the U.K.’s FTSE 100 added 0.6 percent. Germany’s DAX increased 0.8 percent.

Interest Rates

The ECB and the Bank of England announce interest-rate decisions on July 5. ECB officials will lower their benchmark rate by 25 basis points to a record low 0.75 percent, according to the median forecast in a Bloomberg survey of 57 economists. Five predict a cut of 50 basis points and 12 foresee no change.
“There still seems to be some positivity left over from Friday’s European summit announcement on bank bailouts,” David Jones, chief market strategist at IG Index in London, wrote. “With interest-rate decisions expected this week from the ECB and the Bank of England, hopes may be raised about the prospect of further quantitative easing.”
Finland opposes the possibility that the permanent bailout fund, European Stability Mechanism, could purchase bonds on the secondary market, according to a statement on the official website today.
Home prices in China, Singapore and Australia rebounded as demand for property assets rose, boosted by low interest rates.

Asian Manufacturing

In China, the government’s Purchasing Managers’ Index fell to 50.2 in June from 50.4 in May, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing reported yesterday. That beat the 49.9 median estimate in survey of 24 economists.
A separate PMI, compiled by HSBC Holdings Plc and Market Economics, posted a final reading of 48.2 in June compared with 48.4 in May, according to figures released today.
In Japan, large manufacturers became less pessimistic as declines in commodity prices aided profitability, boosting the outlook for the world’s third-biggest economy.
The quarterly Tankan index of sentiment was minus 1 in June from minus 4 in March, the Bank of Japan said today in Tokyo. The median estimate of 19 economists surveyed by Bloomberg News called for a reading of minus 4. A negative number means pessimists outnumber optimists.

U.S. Economy

Stocks pared some of their gains after a U.S. report showed the Institute for Supply Management’s factory index fell to 49.7 in June from 53.5 a month earlier. The median forecast of economists surveyed by Bloomberg News called for a decline to 52. Readings less than 50 signal contraction.
Elsewhere, France will seek to raise as much as 8.3 billion euros through the sale of three-, six- and 12-month bills.
Invensys, which makes software that runs the London Underground trains, gained 2.3 percent to 227.7 pence. China South Locomotive is in the early stages of planning a possible 2 billion-pound ($3.14 billion) takeover bid for the company, the Sunday Times reported, without saying where it got the information.
Aviva advanced 3.8 percent to 283 pence. John McFarlane is taking over the position of chairman from Colin M. Sharman, who is retiring, the company said.

Barclays Chairman

Barclays Plc (BARC) gained 3.7 percent to 168.8 pence after earlier falling as much as 3.8 percent. Chairman Marcus Agius resigned after the bank was fined a record 290 million pounds for trying to rig inter-bank lending rates. Agius, 65, will remain in post until his replacement is appointed. Michael Rake will become deputy chairman.
BNP Paribas SA (BNP), France’s largest bank, jumped 4.4 percent to 31.66 euros. CA Cheuvreux added the stock to its select list, upgrading its recommendation from outperform.
Credit Agricole SA (ACA) increased 7.5 percent to 3.73 euros, the highest since May 4. The lender is holding talks with brokers as it considers selling the unprofitable trading and research activities of its Cheuvreux unit, according to three people familiar with the plans. The stock rallied 8.7 percent on Friday.

Storebrand, Subsea

Storebrand ASA (STB) climbed 4.7 percent to 24.27 kroner as Norway plans changes to occupational pension-product rules that could boost the earnings prospects of the country’s second- largest insurer.
Subsea 7 SA (SUBC), an oilfield-services company, rallied 3.5 percent to 121.20 kroner. The company won a $400 million contract from BG Norge Ltd. for the development of the Knarr Field in the North Sea.
Rhoen Klinikum tumbled 9 percent to 17.18 euros after Fresenius’s bid to buy the hospital operator was foiled by rival Asklepios Kliniken GmbH, which took a 5 percent stake in Rhoen. About 84 percent of Rhoen Klinikum shares were tendered in the offer, Fresenius said after the market closed June 29. The 22.50-euro-a-share bid was contingent on garnering at least 90 percent of the stock.
Linde AG (LIN) fell 2.2 percent to 119.90 euros after agreeing to acquire Lincare Holdings Inc. for about $3.8 billion to add U.S. oxygen and respiratory therapy services delivered to the home.
Vestas Wind Systems A/S (VWS) fell 7.3 percent to 30.06 kroner. Sunday Times reported that the turbine maker is in talks with two banks about restructuring debts after drawing a 300 million- euro credit line. Mikkel Friis-Thomsen, a Vestas spokesman, declined to discuss details of the report.
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Euro Gains Against Dollar As Officials Address Crisis; Yen Falls

The euro strengthened against the dollar after the European Central Bank eased terms for collateral, boosting speculation the central bank will announce a third set of long-term loans.

The 17-nation currency gains were limited amid reports investors to take losses in a Spanish debt restructuring and German Chancellor Angela Merkel said direct bailout funding to banks violates the region’s treaties. The yen weakened as Japanese lawmakers in the lower house prepared to vote on a bill to double sales tax. Risk-sensitive currencies such as New Zealand’s dollar and Mexico’s peso rallied as stocks and commodities rebounded.

“The move by the ECB can help ease some of the funding issues for Spain,” said Joe Manimbo, a market analyst in Washington at Western Union Business Solutions, a unit of Western Union Co. (WU) “The euro is finding a little bit of footing with markets really turning to next week’s EU summit.”

The euro gained 0.2 percent to $1.2570 at 5 p.m. New York time, after adding as much as 0.4 percent. The U.S. currency was 0.2 percent higher against the yen at 80.43, after appreciating to 80.57, the strongest level since May 2. The yen lost 0.4 percent to 101.10 per euro.

Market Forces

The Standard & Poor’s 500 Index rose 0.7 percent and the Standard & Poor’s GSCI Index of 24 raw materials increased 0.8 percent. Crude oil futures rallied 2.5 percent.

Futures traders decreased their bets that the euro will decline against the U.S. dollar, figures from the Washington- based Commodity Futures Trading Commission show.

The difference in the number of wagers by hedge funds and other large speculators on a decline in the euro compared with those on a gain -- so-called net shorts -- was 141,066 contracts on June 19, compared with net shorts of 195,187 a week earlier. They reached a record of 214,418 the week ended June 5.

Canada’s dollar added 0.5 percent to C$1.0246 after touching C$1.0300, its lowest in a week as a rally in crude oil outweighed a report showing inflation advanced at the slowest pace in two years.

New Zealand’s dollar was the best performer against the dollar, gaining 0.5 percent to 79.06 U.S. cents. Mexico’s peso, added 0.4 percent to 13.8624.

Financial Strength

“Financials are rebounding quite strongly, so the market may be set for a reprieve,” said Andrew Wilkinson, chief economic strategist at Miller Tabak in New York. “It’s quite clear that fiscal and banking unions are needed in Europe but what’s needed right now is a timeline.”

The euro retreated as Merkel, speaking to reporters in Rome today at crisis talks before a June 28-29 summit, said Spain is responsible for its own banks and that direct bailout funding of banks violates treaties.

Spanish policy makers considered forcing investors who hold equity and junior debt in banks to absorb losses in a restructuring, according to a person with knowledge of the plan.

“The market sees this as a signal that there is another longer-term refinancing operation coming,” said Steven Englander, head of Group of 10 currency strategy at Citigroup Inc. in New York. “They are targeting the same banks as they did in the first instance, in a sense the LTROs were limited only by the collateral that peripheral banks could bring to the ECB to get the money.”

Euro Range

The shared currency is down from this year’s high of $1.3487 on Feb. 24 and has depreciated about 6.6 percent in the past 12 months, according to Bloomberg Correlation-Weighted Indexes that measure 10 developed-market currencies.

The Dollar Index (DXY), which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six U.S. trading partners, fell 0.1 percent to 82.212 after touching 82.465, the strongest level since June 13.

The dollar climbed above 80 yen yesterday for the first time in a month. Prime Minister Yoshihiko Noda’s Democratic Party struggled to overcome internal resistance to his bill to double Japan’s consumption tax before a lower-house vote that may come as soon as today.

The dollar’s rise versus the yen may stall, according to data compiled by Bloomberg. The greenback faces so-called resistance at the 100-day moving average of 80.41 yen, and may find support at 79.84, the 50-day moving average, the data show.

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Qatar Seeks $5 Billion China QFII Quota, Securities Journal Says

Qatar’s sovereign wealth fund is applying for a license and a $5 billion quota to invest in China under the nation’s Qualified Foreign Institutional Investor program, the China Securities Journal said on its website, citing Energy and Industry Minister Mohammed Bin Saleh al-Sada.

Qatar will allocate the funds mainly for the domestic A- share equity market and initial public offerings, with some investment in bonds, al-Sada said in Beijing, according to a separate report by the Xinhua News Agency said. The decision was made based on Qatar’s confidence in China’s long-term growth potential, Xinhua cited the minister as saying.

Central banks, sovereign wealth funds and financial institutions are looking to China to diversify their assets as Europe’s debt crisis roils financial markets. China said this month it will lower the entry barrier for foreigners seeking to invest in the nation’s capital markets under the QFII program after more than doubling the total quota to $80 billion in April.

Introducing more long-term overseas funds will help improve confidence, promote stable growth in China’s capital markets and provide “robust” returns to domestic investors, the China Securities Regulatory Commission said in May.

The commission said on June 20 it plans to cut the minimum requirement for assets under management to $500 million from $5 billion for companies seeking a QFII license. It will also allow them to invest in the country’s interbank bond market.

Investment Quota

The CSRC will complete the license approval for the Qatar Investment Authority as soon as possible and “actively assist” it in obtaining an investment quota, the China Securities Journal said, citing unnamed officials from the regulator. The newspaper said al-Sada was in Beijing for a China-Qatar investment and cooperation meeting.

The State Administration of Foreign Exchange decides on the amount of foreign-currency funds an institution can invest. It said last month it will speed up the approval process.

Guo Shuqing, the commission’s head, is spurring efforts to give the nation’s bond market a bigger role in financing growth and help divert risk from the state-owned banking system that provides 75 percent of the nation’s credit.

The Shanghai Composite Index, the nation’s benchmark stock gauge, fell to its lowest level in three months on June 21 on concern the nation’s economic growth is slowing. The index has dropped 8 percent since this year’s closing high on March 2.

The Qatar sovereign wealth fund’s planned investment would exceed the current limit of $1 billion per single foreign investor allowed under the QFII program, according to Xinhua and the China Securities Journal.

Quota Increase

Bank of Korea, the Kuwait Investment Authority and the Monetary Authority of Singapore are among the 172 entities granted QFII licenses since the program was introduced in 2002 to allow foreign institutions to buy and sell yuan-denominated securities. Of the total, 145 have been awarded a combined quota of $27.26 billion, the CSRC said on June 20. The total amount allowed before April’s increase was $30 billion.

Singapore’s state-owned investment company Temasek Holdings Pte has already applied to increase its quota after the regulator’s April announcement, according to an e-mailed statement on June 14.

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Tropical Storm Curtails Gulf Of Mexico Energy Output

Anadarko Petroleum Corp. (APC), BP Plc (BP/) and other oil and natural-gas companies curtailed production in the Gulf of Mexico as a weather system strengthened into Tropical Storm Debby, the fourth named storm of the year.

The U.S. Bureau of Safety and Environmental Enforcement said 7.8 percent of oil production and 8.2 percent of gas output in the Gulf has been halted. Anadarko shut four platforms, and BP started closing some oil and gas wells. Apache Corp. (APA) and two other companies began evacuating non-essential workers from some facilities.

Debby was moving slowly northward as of 5:00 a.m. New York time with maximum sustained winds of 50 miles (80 kilometers) per hour and swells as high as 19 feet (six meters), according to the National Hurricane Center. The storm’s projected path indicated it was heading for the Louisiana coast west of New Orleans and would make landfall as early as Monday afternoon before moving west toward Texas. The storm has a 29 percent chance of intensifying to a hurricane by June 26, according to the forecast.

“We do have it strengthening, and it certainly can’t be ruled out that it will reach hurricane strength, but right now all we’re projecting is a tropical storm,” Dennis Feltgen, a spokesman for the hurricane center in Miami, said in a telephone interview.

Early Evacuations

The Gulf of Mexico is home to 6.5 percent of U.S. gas production, 29 percent of oil output and 40 percent of refining capacity. Offshore oil and gas platforms need to carry out evacuations well in advance of a storm’s arrival, so any system in the Gulf can cause production disruptions.

BP, Apache and Chevron Corp. (CVX) said on their websites that they began withdrawing non-essential personnel from some Gulf facilities yesterday. ConocoPhillips (COP) said it’s taking non- essential employees off its Magnolia platform. BP began shutting some wells as it pulled workers and contractors from offshore platforms and rigs in the expected path of Debby, Brett Clanton, a Houston-based BP spokesman, said in an e-mail.

Anadarko halted production at its Neptune, Independence Hub, Constitution and Marco Polo facilities in the eastern and central Gulf of Mexico, the company said on its website. The company will evacuate all employees from the platforms, it said.

Neptune, Shenzi

BHP Billiton Ltd. (BHP) shut the Neptune and Shenzi platforms, which can together produce 150,000 barrels of oil a day and 100 million cubic feet of gas, on June 22. Murphy Oil Corp. (MUR) began evacuating non-critical workers on the same day, as did Anadarko, Marathon Oil Corp., Nexen Inc. (NXY), Enterprise Products Partners LP and Hess Corp. (HES)

Royal Dutch Shell Plc (RDSA) may remove some non-essential workers from rigs in the central and western Gulf in the next few days, the company said on its website.

ERA Helicopters LLC of St. Charles, Louisiana, reported ferrying workers from offshore platforms. Melanie Landry, a spokeswoman for ERA, declined to comment on which companies had called for evacuations.

Jim Rouiller, senior energy meteorologist at Planalytics Inc. in Berwyn, Pennsylvania, said this is the first real threat of the year in the Gulf of Mexico. With the relatively mild start to summer, he said, “this will get the traders looking and saying, ‘Hey, we got something ominous for the Gulf.’”

Wind shear is pushing most of Debby’s wind speed and thunderstorms to the Gulf’s eastern edge, said Mike Pigott, a senior meteorologist with State College, Pennsylvania-based AccuWeather Inc.

Gain Strength

“As long as it remains over the open, warm waters of the Gulf, it could continue to gain strength,” he said. “If the shear relaxes, it could become a hurricane before reaching Texas.”

A storm gets a name when its winds reach 39 miles (63 kilometers) per hour and becomes a hurricane at 73 miles per hour.

Debby is the fourth storm of the Atlantic hurricane season, which runs from June 1 to Nov. 30. It’s the first time since record-keeping began in 1851 that four storms have formed in the Atlantic before July 1, Feltgen said.

“This is the seventh Atlantic season in recorded history where three storms have formed before July 1,” he said. “We have never gone with four storms before July 1.”

Norway Oil Workers Shut Platforms As Mediation Talks Fail

Norwegian offshore workers shut two platforms after mediated talks on pensions and wages failed, curtailing output in Europe’s second-largest crude and natural gas producer.

A government-led mediation was unable to bridge a divide over pensions with the labor unions, Industry Energy, Safe and Lederene, the Norwegian Oil Industry Association said today in an e-mailed statement. The talks had pushed past a midnight deadline before a strike was called.

“Completely unreasonable pension demands from Industry Energy, SAFE and Lederne show they are clearly placing themselves apart from other workers in Norway,” Jan Hodneland, chief negotiator for the association, said in a statement.

The strike will cut oil and gas output as shut production at Statoil ASA (STL)’s Oseberg and Heidrun fields, and close BP Plc (BP/)’s Skarv development, according to the group. About 700 workers are being taken off the job in the initial phase of conflict, which will also hurt operations at Europe’s biggest methanol plant.

“We can’t accept that the employers rob us of our pensions,” Leif Sande and Hilde-Marit Rysst, leaders at the Industry Energy and Safe unions, said in a separate statement.

The platforms will take four to five days to close, the industry association said. BP’s Skarv output start risks being delayed by the conflict, which will cost 150 million kroner ($25 million) a day in lost revenue, the group said.

Production Affected

The strike by oil-platform workers, which is the first industrywide action since 2004, targets about 165,000 barrels of oil equivalent a day, according to the Industry Energy and Lederne unions. That’s equal to about 3.9 percent of average daily production of oil, natural gas and condensate in Norway this year, according to Bloomberg calculations based on data from the Norwegian Petroleum Directorate.

Oseberg has produced an average of about 194,000 barrels of oil equivalent a day in 2012, while Heidrun’s output has averaged 64,000 barrels, according to NPD data. Skarv is due to start production in the fourth quarter according to BP.

All production will be halted at Heidrun while output from Oseberg will be cut by between 94,000 and 101,000 barrels of oil equivalent, Per Helge Oedegaard, an official with the Lederne union, said on June 18. Output from the 2,500 metric tons-a-day Tjeldbergodden methanol plant will also stop after a single day’s strike because gas supplies would halt, he said. The plant is Europe’s biggest, according to Statoil, which owns more than 80 percent of the facility.

Norway, the world’s third-richest nation per capita, last suffered an oil worker strike in 2006 when oil-service employees disrupted drilling for 34 days. Platform workers last went on strike in 2004, according to the Safe labor union, which is part of the action. The employers are represented by the Oil Industry Association.

Norway produced an average of about 2.01 million barrels of oil, natural gas liquids and condensate a day in May, according to the NPD. That includes average oil output of about 1.633 million barrels.

Egypt Stocks Post Biggest Gain Since February; Abu Dhabi Falls

Egypt’s benchmark stock index rose the most in more than four months before the North African country announced the results of its first free presidential elections. Shares in Abu Dhabi declined.

Orascom Construction Industries, the nation’s biggest publicly traded builder, climbed the most since May and Commercial International Bank Egypt SAE (COMI) rose 3.2 percent. Egypt’s EGX 30 index rallied 3.3 percent, the most since Feb. 13, to 4,166.32 at the 2:30 p.m. close in Cairo. The gauge tumbled 8.8 percent last week. The Bloomberg GCC 200 Index (BGCC200)fell 0.4 percent as Abu Dhabi’s ADX General Index (ADSMI) retreated 1.1 percent, the most since March 7.

Egypt’s shares rose “especially after different political factions announced that they will not resort to violence and will accept the choice of the people,” said Wafik Dawood, director of institutional sales at Cairo-based Mega Investments Securities.

Egypt will announce the results of the presidential vote after the market closes today. The Muslim Brotherhood has denied it plans to resort to violence if their candidate, Mohamed Mursi, doesn’t win the race. The Brotherhood will continue peaceful protests against the military’s move to limit the powers of the next president and increase its influence in the writing of a new constitution, Mursi said at a televised press conference over the weekend.

Still, analysts such as Said Hirsh of London-based Capital Economics say the results may spark unrest if former air force commander Ahmed Shafik is declared winner.

Orascom Construction advanced 2.5 percent, the most since May 13, to 221.5 pounds. Commercial International, the country’s biggest publicly traded lender by assets, rallied to 22.28 Egyptian pounds. About 75 million shares were traded in Egypt today, compared with a 12-month daily average of 86 million.

Oil’s decline

In the Persian Gulf shares retreated after oil declined 5.1 percent last week to $79.76 a barrel, extending losses this year to 19 percent. The six-nation Gulf Cooperation Council, including the United Arab Emirates and Saudi Arabia (SABIC), holds about one-fifth of the world’s proven oil reserves.

“All markets across the region are soft on very light activity,” said Julian Bruce, the Dubai-based director of institutional sales trading at EFG-Hermes Holding SAE. “An air of enhanced caution pervades as we await political developments in both Europe and the region.”

Greece will push its creditors to extend fiscal deadlines under the country’s bailout program by at least two years, according to a policy document drawn up by the three parties in the country’s governing coalition.

Dubai’s DFM General Index (DFMGI) retreated 0.7 percent, while Oman’s MSM30 Index (MSM30) lost 0.2 percent and Qatar’s QE Index (DSM) decreased 0.3 percent. Kuwait’s measure tumbled 1.2 percent and Saudi Arabia’s Tadawul All Share Index (SASEIDX) fell 0.4 percent.

Trading Debut

Tokio Marine Saudi Arabia, a company that offers Shariah- compliant property and casualty insurance, closed at 77.5 riyals on its trading debut in Riyadh.

In Israel, the benchmark TA-25 Index (TA-25) lost 0.8 percent at 3:40 p.m. in Tel Aviv. Protalix BioTherapeutics Inc. (PLX) posted its biggest intraday drop in more than a month, slumping 10 percent to 23.27 shekels, after the European Union rejected the biotechnology company’s first drug on the market. Teva Pharmaceutical Industries Ltd. (TEVA) jumped the most in more than seven years, surging 11 percent to 161.3 shekels, after a U.S. federal district judge ruled that competitors’ drug applications for the multiple sclerosis medicine Copaxone infringe its patent.

The yield on Israel’s 5.5 percent benchmark Mimshal Shiklit government bonds due January 2022 rose two basis points, or 0.02 percentage point, to 4.39 percent.