By Mark Gilbert Nov. 25 (Bloomberg) -- The Australian dollar rose and commodities gained on evidence economies are rebounding from the first global recession since World War II. Stocks advanced, while returns on emerging-market bonds climbed to the highest level in at least 16 years. Australia’s currency strengthened 1.1 percent against the dollar at 12:18 p.m. in London and the Dollar Index fell 0.7 percent. The MSCI World Index of 23 developed markets added 0.7 percent. Standard & Poor’s 500 Index futures rose 0.4 percent. Gold rallied 1.2 percent to a record $1,181.30 an ounce in London, and lead paced gains in industrial metals. The Federal Reserve raised its forecast for 2010 U.S. growth yesterday to a range of 2.5 percent to 3.5 percent, from 2.1 percent to 3.3 percent. Australian central bank Deputy Governor Ric Battellino said the economy has entered a “new upswing,” while the U.K. reported that gross domestic product shrank 0.3 percent in the third quarter, better than the initial 0.4 percent estimate. “The macro setting is clearly improving,” said Franz Wenzel, deputy director of investment strategy at Axa Investment Managers in Paris, in a Bloomberg Television interview. Axa oversees about $600 billion. “GDP is going to continue to expand and central banks will remain fairly accommodative.” Pound Climbs The Australian dollar led gains by so-called commodity currencies, climbing against all 16 of its most-traded counterparts. The pound rose 1 percent compared with the dollar and 0.1 percent versus the euro, snapping a five-day decline against the single European currency. The yen advanced 0.9 percent against the dollar after a government report showed Japan’s exports fell at the slowest pace in a year last month. The Swiss franc strengthened past parity with the dollar for the first time since April 2008. The currency appreciated as much as 0.9 percent to 0.9994. The falling dollar sent gold to record highs in New York, London and Shanghai, helped by a report in the Financial Chronicle newspaper that India may purchase more bullion for its central bank reserves. Three-month lead gained 1.7 percent to $2,373 a metric ton on the London Metal Exchange, and copper advanced 1.3 percent to $6,960 a ton. Soybeans for January delivery climbed for a second day in Chicago, rising 0.8 percent to $10.54 a bushel, on speculation demand will increase in China, the world’s biggest oilseed importer. Wheat for March delivery climbed 10.75 cents, or 1.9 percent, to $5.6425 a bushel, rebounding from a five-day, 7.2 percent retreat. European Stocks The Dow Jones Stoxx 600 Index of European shares added 0.4 percent as raw-material producers climbed with metals. BHP Billiton Ltd., the world’s largest mining company, advanced 2.7 percent in London. France Telecom SA gained 1.7 percent in Paris. Europe’s third-biggest phone company will merge its Orange Switzerland unit with TDC A/S’s Sunrise Communications SA division to expand in Switzerland and pay 1.5 billion euros ($2.25 billion) for a majority stake. The MSCI Asia Pacific Index added 1.3 percent. Fuji Heavy Industries Ltd., the maker of Subaru cars, rose 5.3 percent in Tokyo after the exports data. U.S. stock-index futures climbed before reports on consumer spending and confidence, durable-goods orders, initial jobless claims, and new-home sales. Trading may be slower than usual as investors leave early for the Thanksgiving holiday tomorrow. Consumer Spending A report from the Commerce Department at 8:30 a.m. in Washington may show consumer spending increased 0.5 percent last month after dropping by the same amount in September, according to the median estimate of 75 economists. Orders for durables, goods meant to last at least three years, rose 0.5 percent in October after a 1.4 percent gain the previous month. Emerging-market bond yields fell 4 basis points relative to U.S. Treasury notes, pushing JPMorgan Chase & Co.’s benchmark Emerging Markets Bond EMBI+ Index of total returns to a record high of 496. The index measures the average return on emerging- market international bonds since December 1993. The MSCI Emerging-Markets Index of equities gained 0.7 percent. South Africa’s rand climbed 1.3 percent against the dollar, leading gains in developing-nation currencies. Vietnam’s central bank devalued its currency and raised interest rates to rein in inflation and a widening trade deficit that’s eroding confidence in the dong. The State Bank of Vietnam lowered the reference rate 5.2 percent to 17,961 against the dollar, after the gap between spot and black-market rates widened to the most in a decade. Policy makers narrowed the dong’s daily trading band to 3 percent, from 5 percent, effective tomorrow. Fed officials are concerned that record-low interest rates might fuel “excessive” speculation in financial markets and possibly dislodge expectations for low inflation, according to minutes of their Nov. 3-4 meeting published yesterday. The European Central Bank is debating whether to modify the loans it makes available as it starts to scale back support for the region’s banks. Treasuries fell, with the yield on the 10-year note rising 1 basis point to 3.32 percent, according to BGCantor Market Data. The U.S. is scheduled to auction a record $32 billion of seven- year notes today, the third sale of securities this week. To contact the reporter on this story: Mark Gilbert in London at magilbert@bloomberg.net.

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