BLBG:Euro Weakens As Stocks Pare Gains On Economy; Bunds Rise
The euro weakened, erasing earlier gains, while oil fell and stocks pared their advance after a report showed the region’s manufacturing and services industries contracted the most in almost three years. The Dollar Index rose for the first time in three days and German bunds climbed.
The euro depreciated 0.5 percent to $1.2433, reversing a gain of as much as 0.3 percent, at 10:20 a.m. in London. The Australian dollar strengthened against all 16 major peers after the central bank cut rates. The yield on the German 10-year bund fell three basis points to 1.18 percent. The Stoxx Europe 600 Index (SXXP) added 0.2 percent. Futures on the Standard & Poor’s 500 Index slipped 0.2 percent, erasing an earlier advance of as much as 0.6 percent. Oil dropped 0.4 percent to $83.68 a barrel.
A gauge of euro-area services and manufacturing slid to 46 in May, the lowest since June 2009, London-based Markit Economics said today, before a report that will probably show U.S. service industries held at a four-month low. Leaders from the Group of Seven countries are holding a conference call to discuss the European debt crisis today ahead of the G-20 meeting this month. The Reserve Bank of Australia lowered its key interest rate by 25 basis points to 3.5 percent, the lowest level since 2009.
“There’s unlikely to be too much positive news out of today’s data,” said Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce in London. “There are still a lot of structural headwinds, and the data isn’t particularly constructive.”
The euro slid 0.7 percent versus the yen, snapping a two- day advance. The so-called Aussie dollar rose 0.2 percent against its U.S. peer. The Dollar Index, which tracks the U.S. currency against those of six trading partners, climbed 0.4 percent, rising for the first time in the past three days.
The yield on the two-year German note approached zero after it fell to minus 0.012 percent at the end of last week. The yield on the Italian 10-year bond advanced five basis points to 5.71 percent. The yield on the 10-year Treasury note rose three basis points in Asia trading.
To contact the reporters on this story: John Buckley in Amsterdam at johnbuckley@bloomberg.net
To contact the editor responsible for this story: Stephen Kirkland in London at skirkland@bloomberg.net
