European equity futures and the shared currency fell before reports that are forecast to show German factory orders fell and Italy’s economy shrank for a fourth quarter. Asian stocks advanced for a second day.
Futures on the Euro Stoxx 50 Index slipped 0.2 percent as of 7:24 a.m. in London, while those on the Standard & Poor’s 500 Index were little changed. The MSCI Asia Pacific Index (MXAP) added 0.6 percent, set for its best close in almost three months. The euro fell 0.2 percent to $1.2380, while oil and copper declined at least 0.4 percent. Australia’s dollar traded near its highest level since March after the central bank refrained from cutting interest rates. Japan’s 10-year bond yield rose before a central bank meeting that starts tomorrow.
German factory orders fell 0.8 percent in June from the previous month, a Bloomberg survey of economists showed before data today. Italy will say gross domestic product dropped 0.8 percent in the second quarter from the first, according to the median estimate in a separate poll. German Chancellor Angela Merkel backed a bond-buying plan announced last week by the ECB, a spokesman said yesterday, fanning speculation the monetary authority will act to cut borrowing costs for Spain and Italy.
“The risk of the euro being abandoned has been reduced quite substantially,” said Khiem Do, Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management (Asia) Ltd., which oversees about $8 billion. “That’s allowed risk assets to be re-priced.”
The Stoxx Europe 600 Index yesterday climbed to a four- month high. Europe’s broadest equities gauge rose for nine consecutive weeks through Aug. 3, the longest stretch of such gains since 2006, as policy makers eased repayment terms for Spanish lenders and central banks signaled willingness to add stimulus.
More than two shares rose for each that dropped today on the MSCI Asia Pacific Index. President Mario Draghi last week outlined a plan to allow the ECB to buy debt of struggling euro- bloc countries.
To contact the reporter on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net; Adam Haigh in Sydney at ahaigh1@bloomberg.net
To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net
