BLBG:New Zealand Dollar Weakens After Economy Slows; Oil Drops
European stocks fell for a fourth day and commodities dropped after manufacturing contracted in Europe and China. The euro weakened against the dollar while German bonds advanced.
The Stoxx Europe 600 Index (SXXP) lost 1.1 percent at 10:25 a.m. in London. Standard & Poor’s 500 Index futures slipped 0.6 percent. The euro depreciated 0.5 percent to $1.3157. The yield on the 10-year German bund decreased five basis points to 1.93 percent. Copper sank 1.6 percent and nickel retreated to the lowest price this year.
European manufacturing fell to 47.7 as factory output unexpectedly shrank in Germany and France, according to London- based Markit Economics. A preliminary measure of Chinese manufacturing slipped to 48.1 in March, the lowest level in four months, based on figures from HSBC Holdings Plc and Markit Economics. A gauge of U.S. leading indicators probably increased in February, economists said before Conference Board data today.
“People have been too optimistic regarding global economic recovery,” said Stephane Ekolo, chief European strategist at Market Securities in London. “We will hear more and more people saying China is heading for a hard landing and that the euro zone isn’t finished with its problems.”
The Stoxx 600 declined to the lowest level since March 13 as mining and construction companies led losses. Randgold Resources Ltd. (RRS), which operates three mines in Mali, plunged 13 percent as an army officer said the West African country’s government has been overthrown. Baloise Holding AG sank 5.1 percent as Switzerland’s third-largest insurer said profit dropped 86 percent last year.
Leading Indicators
The decline in S&P 500 futures indicated the U.S. gauge will retreat for a third day. The index of leading economic indicators rose 0.6 percent in February following a 0.4 percent gain in January, a report by the Conference Board may show, according to a Bloomberg survey of economists. Other data may show initial jobless claims in the world’s biggest economy fell to 350,000 in the week ended March 17, from 351,000 a week earlier, economists forecast.
The yield on the 10-year Treasury note fell four basis points to 2.26 percent.
The euro fell for a third day versus the dollar. The yen gained against all 16 of its major peers, advancing 1 percent versus the euro and 1.4 percent against Australia’s currency. Japan’s exports unexpectedly exceeded imports by 32.9 billion yen ($395 million) in February, the government said. The Dollar Index rose 0.2 percent.
The cost of insuring European sovereign bonds rose for a second day, with the Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments climbing 12.5 basis points to 282.5.
Commodities Slide
The S&P GSCI (SPGSCI) gauge of commodities declined 0.8 percent. Aluminum dropped to 1.1 percent and nickel fell 1.3 percent to the lowest price since Dec. 29 on a closing basis. New York oil retreated 1.2 percent to $106 a barrel.
The MSCI Emerging Markets Index (MXEF) fell 0.4 percent, heading for its sixth straight decline. The Micex Index (MICEX) slid 0.8 percent in Moscow and the FTSE/JSE Africa All Shares Index (JALSH) retreated 0.8 percent in Johannesburg. The BSE India Sensitive Index (SENSEX) fell 2.3 percent. The Hang Seng China Enterprises Index (HSCEI) lost less than 0.1 percent, its seventh straight loss and its longest losing streak since June.
The lira appreciated 0.2 percent against the dollar as Turkey tightened monetary policy by withdrawing funding for banks at its benchmark rate for the first time in more than two months.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
