The euro traded near a two-month high against the dollar and Spanish bonds rallied as the region’s leaders prepared for talks to address the debt crisis. European stocks fell and soybeans climbed to a record. The euro strengthened 0.2 percent to $1.2611 at 9:30 a.m. in London. Spanish two-year notes rallied relative to 10-year bonds, widening the yield spread between the securities to the most on record. The Australian dollar rebounded from its weakest level in almost six weeks versus the U.S. currency. The Stoxx Europe 600 Index lost 0.3 percent, while Standard & Poor’s 500 Index futures added 0.2 percent after U.S. markets were closed yesterday for a holiday. Soybeans rose as much as 1.9 percent. European leaders are meeting in Rome and Berlin today, two days before the European Central Banks holds its policy meeting on Sept. 6. ECB President Mario Draghi is due distribute his bond-purchasing plan to national banks after telling officials yesterday he would be comfortable buying three-year government bonds to bring down borrowing costs. U.S. factory activity probably remained little changed in August, economists said before the Institute for Supply Management’s report. The ECB “is more likely to trigger action when they meet� in two days, said Matthew Sherwood, Sydney-based head of markets research at Perpetual Investments, which manages about $25 billion. “Whether it’s comprehensive enough to keep sentiment strong and keep markets rallying is a different issue because in the end there’s not much central banks can do to address the global debt situation.� Default Risk The cost of insuring against default on Austrian debt approached the lowest in more than a year before a government bond auction. Credit-default swaps linked to the nation fell three basis points to 88 basis points, making the contracts the best performing sovereign swaps globally in the past three months. Swaps on European corporate debt fell to the lowest in two weeks, with the Markit iTraxx Europe index linked to the debt of 125 investment-grade companies declining three basis points to 142 basis points. Three shares gained for every two that fell in the Stoxx 600 (SXXP), as health-care and household-goods companies retreated. Ashtead Group Plc, a U.K. construction-equipment rental company with most of its business in the U.S., surged 8.5 percent to a record after saying full-year earnings will be “materially better� than previously forecast. ISM Manufacturing The advance in S&P 500 futures indicated the U.S. equities gauge will rebound from two straight weeks of losses. The Institute for Supply Management’s manufacturing index was probably at 50 in August, according to the median estimate of 70 economists surveyed by Bloomberg News. It was at 49.8 in July, below the level of 50 that marks the dividing line between expansion and contraction. Soybeans climbed to an all-time high of $17.89 a bushel. Prices have risen 47 percent this year as the worst U.S. drought in 56 years curbed output. Copper fell 0.2 percent, the first decline in three days. The MSCI Emerging Markets Index (MXEF) lost 0.1 percent. The Shanghai Composite Index (SHCOMP) dropped 0.8 percent as Goldman Sachs Group Inc. cut estimates for Chinese earnings and Societe Generale SA lowered its growth forecast for the world’s second- largest economy. India’s Sensex slipped 0.2 percent and Russia’s Micex Index rose 0.2 percent. To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Richard Frost in Hong Kong at rfrost4@bloomberg.net; To contact the editor responsible for this story: Justin Carrigan at jcarrigan@bloomberg.net

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