BLBG:Euro Weakens as Italian Bonds Fall After Deadlock on Greek Talks
The euro weakened against the dollar for the first time in three days and Italian bonds fell after the region’s finance ministers failed to agree on a debt- reduction package for Greece. The dollar strengthened against the yen while copper led metals lower.
The euro declined 0.2 percent to $1.2788 at 11 a.m. in London. The dollar appreciated to more than 82 yen for the first time since April after Japan’s exports fell more than expected. Italy’s 10-year bond yield climbed three basis points to 4.88 percent. The Stoxx Europe 600 Index (SXXP) was little changed, while futures on the Standard & Poor’s 500 Index slipped 0.1 percent. Copper lost 0.9 percent.
Europe’s finance ministers will regroup on Nov. 26 after more than 11 hours of talks broke up in Brussels today with creditors led by Germany refusing to put up fresh money for Greece or offer debt relief. Japanese shipments dropped for a fifth month, pushing the world’s third-largest economy closer to recession. A report today may show initial claims for U.S. jobless benefits fell to 410,000 last week from 439,000 the previous period, according to a Bloomberg survey of economists.
“European policy makers raised expectations that something would happen on Greece and then they didn’t deliver,” said Ned Rumpeltin, head of Group-of-10 currency strategy at Standard Chartered Group Plc in London. “What we are seeing is European risk coming back on to the agenda. It does put downward pressure on the euro.”
Dollar Strength
The dollar rose against all but one of its 16 major peers, strengthening most against the rand and the yen.
U.S. government securities due in 10 years and longer returned 2.2 percent in the past month, including currency moves, the most of 144 sovereign indexes tracked by Bloomberg and the European Federation of Financial Analysts Societies. The 10-year note yield fell less than one basis point today to 1.66 percent. The rate on similar-maturity German bunds was little changed at 1.41 percent.
S&P 500 futures pared an earlier declined of 0.7 percent. Salesforce.com Inc. rose 1.1 percent in German trading after its forecasts for fiscal fourth-quarter sales and profit that were in line with analysts’ estimates. U.S. markets will be closed for the Thanksgiving holiday tomorrow.
Federal Reserve Chairman Ben S. Bernanke said yesterday an agreement on ways to reduce long-term federal budget deficits would remove an impediment to growth, while failure to avoid the so-called fiscal cliff would pose a “substantial threat” to the recovery. The S&P 500 has fallen as much as 5.3 percent since the Nov. 6 election set up a budget showdown between President Barack Obama and the Republican-controlled House.
Economic Indicators
Other data today may show the index of U.S. leading economic indicators rose for a second month in October. The Conference Board’s gauge of the outlook for the next three to six months increased 0.1 percent after a 0.6 percent advance in September, according to the median estimate in a Bloomberg survey.
The Thomson Reuters/University of Michigan consumer sentiment index probably rose to 84.5 in November from 82.6 in October, according to a Bloomberg survey of economists before the report is released at 9:55 a.m. New York time. The group issued a preliminary number of 84.9 earlier this month. The index hasn’t been higher than 84 since July 2007.
In Europe, the Stoxx 600 erased an earlier drop of as much as 0.3 percent. Daimler AG and Renault SA led automakers higher, rising at least 1.5 percent. Johnson Matthey Plc slid 5.9 percent as the maker of a third of all autocatalysts reported a 2.2 percent drop in first-half profit.
Japan Exports
Japan’s exports fell 6.5 percent in October from a year earlier, leaving a trade deficit of 549 billion yen ($6.7 billion), the Finance Ministry said today. Economists estimated a 4.9 percent decline in exports. Imports dropped 1.6 percent.
The Japanese currency weakened 2.5 percent in the past week, the worst performer tracked by Bloomberg Correlation- Weighted Currency indexes, amid speculation national elections next month will hand power to an opposition party in favor of more stimulus.
Copper for three-month delivery fell to $7,712.50 a metric ton on the London Metal Exchange. All six main industrial metals traded on the bourse declined by 1 percent or more.
West Texas Intermediate oil futures were at $87.11 a barrel, 36 cents up, after paring an earlier gain to as much $87.40 in overnight electronic trading on the New York Mercantile.
Gas Exporters
Ministers from the 12-nation Gas Exporting Countries Forum are gathering today in Malabo, the capital of Equatorial Guinea, amid mounting calls by consumers to scrap a 40-year-old system that links natural gas costs to oil prices.
Secretary of State Hillary Clinton will shuttle today through Jerusalem, the West Bank and Cairo in a bid to salvage a proposed cease-fire intended to halt a weeklong torrent of Palestinian rockets and Israel air strikes. An explosion on a bus in Tel Aviv left at least 10 people injured, Israeli Army Radio reported.
The MSCI Emerging Markets Index added 0.2 percent, gaining for a third day, as Chinese stocks rose. The Shanghai index jumped 1.1 percent, the most since Nov. 1, on speculation the central bank will lower reserve-ratio requirements to boost investor confidence.
To contact the reporter responsible for this story: Michael Shanahan at mshanahan3@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
