The euro fell the most in a week against the dollar, Asian shares slid for a third day while bond risk climbed amid concern Europe’s debt crisis is worsening. Europe’s shared currency sank 0.6 percent to $1.4073 and snapped a three-day gain against the yen as of 11:51 a.m. in Hong Kong. The MSCI Asia Pacific excluding Japan Index retreated 0.4 percent, while Standard & Poor’s 500 Index futures lost 0.4 percent. The Markit iTraxx Australia index increased to the highest since Aug. 30. August-delivery gold rose for a 10th day, silver futures jumped 1.8 percent, while wheat and corn both declined at least 1.2 percent. European leaders are holding a special summit this week as they seek to contain the region’s debt crisis, after eight of the region’s banks failed stress tests and European Central Bank President Jean-Claude Trichet reiterated the ECB won’t accept as collateral bonds from a nation that defaults. President Barack Obama continued to reach out to lawmakers in both parties this weekend in search of a deficit-cutting deal as the Aug. 2 deadline for raising the U.S. debt ceiling looms. “What you have at the moment is a lot of indecision,” Simon Flood, chief investment officer at Lion Global Investors Ltd., said in a Bloomberg Television interview from Singapore. “The biggest risk that concerns investors at the moment is what is going to happen in the U.S. People are obviously watching the developments in Europe.” The euro weakened against 13 of 16 most-actively traded counterparts. It slid 0.6 percent to 111.29 yen and reached a record low against the Swiss franc. Euro-area government leaders will hold a special summit in Brussels on July 21 to put added political momentum behind efforts to halt the debt crisis, European Union President Herman Van Rompuy said in an e-mailed statement on July 15. Stress Tests Regulators said on July 15 the eight banks that failed EU stress tests, including two from Greece, had a combined capital shortfall of 2.5 billion euros ($3.5 billion). As many as 16 more lenders will need to bolster capital after scraping through, the European Banking Authority said. A default rating would make Greece’s debt ineligible as collateral for cash from the ECB, impairing the lifeline to the country’s banks and sparking contagion across the region. The ECB is the main source of finance for Greek lenders. “It’s reflective of how weak the banks are in Europe,” said Charles Han, Hong Kong-based director of foreign-exchange trading at Newedge Financial HK Ltd. “This is all just symptomatic of the issues going on in the EU right now. You’re going to continue to see risk aversion as a result of this and it will clearly weigh on the euro.” Aussie, Won The Australian dollar weakened for a third day, sliding 0.5 percent to $1.0601. South Korea’s won snapped a three-day rally, retreating 0.3 percent to 1,061.15 per dollar. The cost of insuring Asia-Pacific corporate and sovereign bonds against non-payment increased, with the Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan increasing two basis points to 123, Deutsche Bank AG prices show. That will be the highest since Sept. 24. The Markit iTraxx Australia index climbed 2.5 basis points to 126 basis points, according to Deutsche Bank. Almost seven shares declined for every five that gained on MSCI’s Asia Pacific ex-Japan Index. South Korea’s Kospi Index dropped 0.5 percent, while Hong Kong’s Hang Seng Index gained 0.5 percent. Japan’s financial markets are closed for a holiday. HTC Corp. (2498), the Taiwanese maker of smartphones, sank 2.8 percent after a U.S. International Trade Commission ruled it infringed on two patents of Apple Inc. News Corp. (NWSA) slumped 5.6 percent as the scandal over phone hacking at the now defunct News of the World widened with the arrest of former News International chief Rebekah Brooks. Developers Fall China Vanke Co. retreated 1.1 percent on concern the government will intensify property curbs to slow price gains. New home prices in Beijing and Shanghai rose 2.2 percent last month, according to government data today. City Developments Ltd. (CIT) paced a drop in Singapore’s real estate shares after statistics released on July 15 showed private home transactions fell 25 percent in June. Futures indicate the S&P 500 may add to last week’s 2.1 percent loss. International Business Machines Corp., Bank of America Corp., Goldman Sachs Group Inc., Intel Corp., Apple Inc. are among more than 100 S&P 500 companies that will report quarterly earnings this week. Treasuries rose on July 15, with 10-year yields falling five basis points to 2.91 percent, even after Standard & Poor’s became the second ratings company to say last week it may cut the U.S.’s top credit grade. House Republicans plan a vote this week on legislation to limit spending and tie a $2.4 trillion increase in the debt ceiling to a constitutional amendment to balance the budget. That plan stands little chance in the Democratic-controlled Senate. Gold, Silver Gold for immediate delivery rose as much as 0.3 percent to a record $1,598.60 an ounce before trading 0.1 percent higher at $1,595.10. August futures gained 0.3 percent to $1,595.50, after earlier reaching $1,599.20. Silver for September delivery jumped 1.8 percent to $39.765 an ounce, extending a three-day, 9.6 percent rally. Oil for August delivery traded at $97.14 a barrel, near a two-day high, on the New York Mercantile Exchange. The contract climbed 1.1 percent last week, the third weekly gain. Brent oil for September settlement was at $116.95 a barrel, down 0.3 percent, on the London-based ICE Futures Europe exchange. Wheat futures declined 1.3 percent to $6.855 a bushel, bound for a third day of losses, on speculation demand for U.S. supplies may wane as importers switch to cheaper exports from Russia. Egypt, the world’s biggest importer, agreed to buy 180,000 metric tons of Russian wheat, the government said July 15. Corn retreated 1.2 percent to $6.7675 a bushel To contact the reporter on this story: Shiyin Chen in Singapore at schen37@bloomberg.net. To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

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