BLBG:Euro Falls On Economy; Stocks Gain On China Stimulus Bet
The euro weakened on concern the region’s economy will deteriorate further. Germany’s benchmark bund pared declines, European stocks (MXWD) swung between gains and losses and corn climbed to a record.
The euro depreciated 0.5 percent to $1.2303 at 7:20 a.m. in New York. The Stoxx Europe 600 Index (SXXP) rose 0.1 percent and Standard & Poor’s 500 Index futures slipped less than 0.1 percent. The yield Germany’s 10-year bond increased less than one basis point, after jumping as much as five basis points. Corn advanced 0.9 percent before a U.S. harvest report.
The euro-area’s economy will shrink 0.3 percent this year, down from a 0.2 percent contraction predicted earlier, according to a European Central Bank survey of professional forecasters. Stocks rose earlier as easing inflation in China fueled speculation policy makers will do more to boost growth. The U.S. government is likely to cut its corn-harvest estimate tomorrow after the worst U.S. drought in at least a generation damaged crops, according to analysts surveyed by Bloomberg.
“The situation in Europe remains uncertain and the data has been weaker,” said Bernd Berg, a currency strategist at Credit Suisse Group AG’s private banking unit in Zurich. “The euro should go lower.”
The euro declined against 13 of its 16 major counterparts, dropping 0.6 percent versus the yen. New Zealand’s dollar weakened against all 16 major peers after the nation’s jobless rate climbed to a two-year high last quarter.
Nestle Beats
The Stoxx 600 advanced for a fifth day. Nestle SA, the world’s largest food company and the biggest stock in the Stoxx 600, climbed 2.8 percent after posting first-half sales growth that exceeded analysts’ projections. Subsea 7 SA, a Norwegian provider of offshore oilfield services, climbed 5.8 percent in Oslo trading after second-quarter earnings analyst estimates.
U.S. futures were little changed after the S&P 500 advanced for a fourth day yesterday. A report at 8:30 a.m. in Washington may show initial claims for jobless benefits increased to 370,000 last week from 365,000 in the previous period, according to a Bloomberg survey of economists. The U.S. 30-year bond yield was little changed at 2.75 percent before the government sells $16 billion of the debt.
The MSCI Emerging Markets Index rose 0.8 percent. The Hang Seng China Enterprises Index of mainland companies rose 1 percent. China’s consumer prices rose 1.8 percent last month, compared with a 2.2 percent gain in June. South Korea’s Kospi Index jumped 2 percent. The Bank of Korea said growth momentum is “slackening,” fueling speculation for rates cut borrowing after keeping its interest rate unchanged today.
Gold for immediate delivery reached $1,618.80, the highest price since July 31. Natural-gas dropped 0.7 percent on speculation a supply glut will worsen once the summer cooling season ends.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net;
To contact the editor responsible for this story: Mark Gilbert at magilbert@bloomberg.net
