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By Bloomberg

Stocks gained around the world and the dollar strengthened as China’s economy expanded more than estimated. Palladium gained with Japanese bonds and oil in New York held losses.

The Stoxx Europe 600 Index rose 0.5 percent by 8:18 a.m. in London, while Standard & Poor’s 500 Index futures added 0.4 percent before U.S. markets open from a three-day weekend. Gains by Chinese shares in Hong Kong led the MSCI Asia Pacific Index higher as China grew 7.4 percent last year versus projections for 7.3 percent. The Bloomberg Dollar Spot Index advanced 0.3 percent as Treasuries rose, while the yield on Japan’s five-year notes dropped below zero for the first time. Palladium added 0.5 percent. Oil in New York fell 2.8 percent.

Demand for U.S. assets is rising as the Bank of Japan begins a two-day policy meeting and speculation mounts that the European Central Bank will expand asset purchases this week. China announced what was still the slowest pace of annual growth since 1990 after a tightening of margin-lending regulation sparked a $291 billion rout in the country’s equity market yesterday. Industrial production and retail sales readings also beat estimates.

“The speculation is that the ECB will come up with large scale QE and that’s what the market is playing at the moment,” said Mark Andersen, co-head of global asset allocation at UBS Group AG’s wealth-management unit. “On the China side the positive story today was that we didn’t see the economy slow further. We saw retail sales a bit stronger so that’s suggesting that the Chinese economy is not falling apart. That’s another positive.”

Just one of the 19 groups on the Stoxx 600 retreated today. Europe’s benchmark index is heading for its highest close since January 2008. A subindex of banks led gains before the ECB meeting.

Philips, SAP

Koninklijke Philips N.V. added 3 percent. KKR & Co. and CVC Capital Partners Ltd. want to offer the maker of electric appliances an alternative to a possible initial offering of its lighting division, Financieele Dagblad reported, without saying where it got the information.

SAP SE tumbled 4 percent after the largest maker of business-management software lowered its 2017 profit target.. Unilever PLC dropped 1.5 percent. The company whose detergents and deodorants are used by 2 billion consumers daily said full- year performance will be similar to last year after posting quarterly sales growth that trailed analysts’ estimates.

China’s benchmark stock index climbed as much as 2.4 percent today after it plunged 7.7 percent on Monday in Shanghai, led by brokerages. Regulatory efforts to rein in record margin lending sparked concern that speculative traders will pull back from the world’s best-performing stock market in 2014.

Hong Kong

Hong Kong’s Hang Seng Index added 0.9 percent and the Hang Seng China Enterprises Index climbed 2.3 percent after yesterday’s biggest plunge since November 2011. Australia’s S&P/ASX 200 Index was little changed.

Gross domestic product rose 7.3 percent in the three months ended December from a year earlier, the statistics bureau said in Beijing, beating the median estimate of 7.2 percent in a Bloomberg survey of analysts. Retail sales increased 11.9 percent from a year earlier, compared with the 11.7 percent seen by economists and industrial production also beat projections.

The greenback strengthened against most currencies. The dollar bought 118.33 yen and traded at $1.1578 per euro. The currency closed at $1.1567 per euro on Jan. 16, the strongest since Nov. 11, 2003. The New Zealand dollar weakened 0.7 percent to 77.31 U.S. cents and Norway’s krone slid 0.2 percent.

Negative Yields

In Japan, speculation about further easing by the BOJ was likely driving a government bond rally, said Tokyo-based Takafumi Yamawaki, chief rates strategist at JPMorgan Securities. The yield on 0.1 percent government note due December 2019 fell one basis point to -0.005 percent, breaking below zero for the first time. The rate on 10-year bonds slid 0.5 basis point to a fresh all-time low of 0.195 before rebounding. The Topix index climbed 1.8 percent.

The benchmark U.S. 10-year yield fell two basis points to 1.81 percent, according to Bloomberg Bond Trader data. The 2.25 percent note due in November 2024 climbed 6/32, or $1.88 per $1,000 face amount, to 103 28/32.

Futures are signaling equity gains after the S&P 500 capped a third straight weekly decline. Nasdaq 100 Index contracts added 0.5 percent and those on the Dow Jones Industrial Average climbed 0.4 percent.

Denmark, Switzerland

Morgan Stanley, Johnson & Johnson and McDonald’s Corp. are among companies reporting financial results this week. Profit at S&P 500 companies climbed 0.8 percent in the fourth quarter, according to the average analyst estimate compiled by Bloomberg.

The Danish central bank cut its deposit rate on Jan. 19 by 15 basis points to minus 0.2 percent, matching a record low last held during the darkest hours of Europe’s debt crisis in 2012. Denmark will probably deliver another cut on Jan. 22, after the European Central Bank unveils the details of its bond-purchase program, according to Danske Bank A/S.

Denmark follows the Swiss National Bank, which sparked one of the most violent currency moves in decades on Jan. 15 by abandoning the franc’s cap to the euro.

West Texas Intermediate crude oil traded at $47.26 a barrel in New York, where a public holiday meant there was no settlement of futures yesterday. Natural gas plunged 4.5 percent amid forecasts for milder weather. Brent crude, the benchmark grade for more than half the world’s oil, retreated 0.7 percent in London after sliding 2.4 percent to $48.97.

Rinngit Drops

Malaysia’s ringgit slid 1.1 percent to 3.6120 per dollar, near the weakest since April 2009. Malaysia trimmed its growth forecast and said the budget deficit in 2015 will be wider than initially targeted after a slump in global oil prices curbed revenue for the crude producer.

Gold rose 0.3 percent to $1,279.96 and palladium for immediate delivery rose to $764.70 an ounce. The metal that’s used in emission-control systems for cars, fell 17 percent from the start of September through Jan. 16. While each car requires only a few grams of palladium, demand in 2015 will probably exceed supply for a fourth consecutive year, according to Johnson Matthey Plc, a maker of catalytic converters for automobiles.