BLBG:Euro Slips With Spain Bonds as Commodities Gain Before U.S. Data
The euro weakened amid signs the discord has widened over how to stem the debt crisis and Spanish bonds stayed lower after borrowing costs rose at a bill sale. Commodities gained before reports that will probably show U.S. consumer confidence and the housing market improved.
The euro declined 0.1 percent to $1.2914 at 10 a.m. in London. Spain’s two-year note yield climbed six basis points to 3.10 percent and the rate on similar-maturity Italian securities increased five basis points to 2.30 percent. Copper jumped 0.8 percent and oil increased 0.7 percent. The Stoxx Europe 600 Index and Standard & Poor’s 500 Index futures swung between gains and losses.
Disagreement on the creation of a banking union, indecision on whether Spain needs a full rescue and difficulty in Greece on meeting bailout commitments are the latest evidence leaders are failing to draw closer to solve the debt crisis. Spain sold 4 billion euros ($5.2 billion) of three- and six-month bills at an auction as yields increased. Confidence among American consumers probably rebounded this month and a gauge of home prices rose the most in almost two years in July, economists said before reports today.
“We expect the euro zone to muddle through its tortuous crisis-management process for a very long time,” said Benjamin Yeo, Singapore-based head of investment strategy at Barclays Plc’s wealth-management, which handles about $285 billion. “The region’s headwinds will remain a strong headwind for the global economy.”
The euro against all but two of its major peers, falling as much as 0.4 percent to 100.24 yen, the weakest level since Sept. 13.
German 10-year bonds rose a second day, pushing the yield to as low as 1.53 percent, the least since Sept. 11. Ten-year Treasuries were little changed, yielding 1.71 percent, after rising for the past six days.
The cost of insuring European corporate debt rose for a second day, with the Markit iTraxx Crossover Index of credit- default swaps on 50 mostly junk-rated companies climbing seven basis points to a three-week high of 539. The Markit iTraxx SovX Western Europe Index of 14 governments rose two basis points to 137 basis points.
Three shares declined for every two that gained in the Stoxx 600. (SXXP) The index has rallied 17 percent from this year’s low on June 4 as European Central Bank policy makers agreed to implement an unlimited bond-buying program and the Federal Reserve unveiled a third round of asset purchases.
Earnings Outlook
Daily Mail & General Trust Plc (DMGT), publisher of the Daily Mail newspaper, advanced 2.4 percent after saying full-year results will be in line with analyst estimates. Telekom Austria AG plunged 9.3 percent to an 11-year low after cutting its dividend. Continental AG sank 4 percent as Schaeffler AG sold a 10.4 percent stake in the tire producer. Standard Chartered Plc slipped 2.2 percent after a report that the bank’s largest shareholder talked to potential buyers for its holding.
U.S. futures were little changed after S&P 500 declined for a third day yesterday. An index from S&P/Case-Shiller may show home prices in 20 U.S. cities rose 1.1 percent in July from the year-before period, the biggest gain since August 2010, according to a Bloomberg survey of economists. The Conference Board’s index of consumer confidence probably increased to 63.2 in September from 60.6 in August, a separate poll showed.
Caterpillar Inc. declined 2.4 percent in European trading as the world’s biggest maker of construction and mining equipment cut its forecast for 2015 earnings.
Euro Weakens
Nickel led commodity gains, rising 1.5 percent. Copper advanced to $8,250 a metric ton and oil in New York rose to $92.61 a barrel. The U.S. is the biggest oil consumer and second-biggest user of copper. Lean hogs climbed as much as 0.7 percent to the highest since Aug. 3.
The MSCI Emerging Markets Index (MXEF) lost less than 0.1 percent. The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong retreated 0.4 percent. The Shanghai Composite Index slid 0.2 percent. South Korea’s Kospi index and Taiwan’s Taiex Index each lost 0.6 percent. Russia’s Micex Index (INDEXCF) rose 0.4 percent and India’s Sensex gained 0.3 percent.
To contact the reporter on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jason Clenfield in Tokyo at jclenfield@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
