The franc strengthened to a record against the euro, while shares from Germany to the U.K. rebounded with gold after the Swiss central bank ended its minimum exchange rate. Copper led a commodities rebound as U.S. stocks fluctuated amid bank earnings.
The franc jumped 15 percent to 1.02407 against the euro at 9:37 a.m. in New York, after reaching 85.17 centimes. The Swiss Market Index slid 10 percent, while benchmark gauges in Germany and France rose at least 1 percent. The Standard & Poor's 500 Index advanced 0.1 percent. The 10-year Treasury yield decreased one basis points to 1.84 percent. The euro weakened 0.6 percent to $ 1.1719. Gold futures rose 1.7 percent to $ 1,255 an ounce while copper surged 2.3 percent.
The Swiss National Bank unexpectedly gave up its minimum rate of 1.20 per euro today, ending a three-year-old policy designed to shield the economy from the euro area's sovereign debt crisis. It also lowered deposit rates further. The European Central Bank meets next week amid speculation it will widen an asset-purchase program. U.S. wholesale prices fell the most three years, showing little sign that inflation's bubbling up.
"Markets need some time to reassess the consequences," said Pierre Mouton, who helps oversee $ 8 billion at Notz, Stucki & Cie. in Geneva. "The SNB's situation had become unsustainable as the pressure on the franc was so high. It's also possible that the SNB knows or thinks that the ECB will do something massive and put even more pressure on the franc, so they anticipated the ECB's move."
Pedestrians pass the window display of a Jaeger-LeCoultre watch store, a subsidiary of Cie. Financiere Richemont SA, on the Rue du Rhone in Geneva, Switzerland. Stocks fell with Cie. Financiere Richemont sliding 16 percent, UBS Group AG sliding 14 percent and Roche Holding AG losing 11 percent. Close
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Pedestrians pass the window display of a Jaeger-LeCoultre watch store, a subsidiary of Cie. Financiere Richemont SA, on the Rue du Rhone in Geneva, Switzerland. Stocks fell with Cie. Financiere Richemont sliding 16 percent, UBS Group AG sliding 14 percent and Roche Holding AG losing 11 percent.
Target Range
The latest move marks an attempt by the SNB to reinforce defenses before ECB policy makers meet to discuss introducing new stimulus, including quantitative easing, which may add to pressure on the franc against the euro.
The franc jumped at least 15 percent against its 16 major counterparts, climbing to 87.62 centimes versus the dollar, after touching 74.06, the strongest since August 2011.
Swiss stocks fell with Cie. Financiere Richemont sliding 16 percent, UBS Group AG sliding 14 percent and Roche Holding AG losing 11 percent.
Banks dragged equity markets lower in Poland, Hungary and the Czech Republic as the franc's appreciation boosted the cost of loan in the Swiss currency. The WIG20 index slid 2 percent as PKO Bank Polski SA, Poland's biggest lender, and Bank Zachodni WBK SA slid more than 6 percent.
The S&P 500 fell 0.6 percent yesterday, extending its 2015 decline to 2.3 percent, the worst start to a year since 2009, as a decline in American retail sales combined with a slump in copper prices.
Producer Prices
Wholesale prices in the U.S. declined 0.3 percent in December, the most in three years. A sustained plunge in energy prices is keeping a lid on inflation throughout the pipeline, from bills for businesses to the consumer's cost of living.
Weak price growth has convinced Federal Reserve officials to remain "patient" in their timing of the first interest rate increase since 2006 after ending monthly asset purchases three months ago.
A gauge of manufacturing in the New York region rose to 9.95, above economist estimates for a reading of 5. Separate data showed more Americans unexpectedly filed applications for unemployment benefits last week, indicating companies let go of seasonal workers following the holidays.
Bank of America Corp. slipped 3.7 percent after the second-largest U.S. lender said fourth-quarter profit fell 11 percent. Citigroup Inc. dropped 2.8 percent as earnings missed estimates.
India Rate
BlackBerry Ltd. slid 15 percent after saying it hasn't engaged in takeover talks with Samsung Electronics Co. The stock soared 30 percent yesterday after Reuters reported that Samsung had recently made a bid valuing the Canadian smartphone maker at as much as $ 7.5 billion.
India's S&P BSE Sensex jumped 2.7 percent, the most since May, and the rupee strengthened 0.8 percent. Central bank Governor Raghuram Rajan cut the benchmark repurchase rate to 7.75 percent from 8 percent, the first reduction since May 2013, and said inflation will probably be below 6 percent by January 2016.
China Stocks
The Shanghai Composite Index (SHCOMP) increased 3.5 percent and the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong added 1.5 percent. China's aggregate financing surged to 1.69 trillion yuan ($ 273 billion) in December, exceeding the 1.2 trillion yuan median estimate in a Bloomberg survey.
Copper led a rebound in industrial metals after slumping to the lowest in more than five years as credit growth surged in China. The nation accounts for 45 percent of global copper demand, compared with 8 percent for the U.S., Morgan Stanley estimates.
Copper climbed as much as 2.7 percent to $ 5,699 a metric ton on the London Metal Exchange. The metal slid 5.3 percent yesterday to its lowest closing price since July 2009 amid speculation China's copper demand growth is slowing.
Oil advanced in New York and London after OPEC said that a slump in prices will start to erode U.S. supply growth this year. West Texas Intermediate crude rose 0.9 percent to $ 48.93 a barrel.
The rate of U.S. supply growth will be slower than previously forecast, OPEC said, as companies curb drilling activity and cut spending plans. U.S. output surged to 9.19 million barrels a day last week, the fastest pace in weekly records dating back to January 1983, the Energy Information Administration reported yesterday.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Nick Gentle in Hong Kong at ngentle2@bloomberg.net
To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net Jeremy Herron, Stephen Kirkland
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