BLBG:Euro Climbs to Four-Week High Before ECB as S&P 500 Gains
The euro strengthened to a four-week high against the dollar before a European Central Bank meeting that is expected to leave interest rates unchanged. U.S. stock-index futures gained before jobs data, while Spanish bonds stayed lower after the government sold debt.
The 17-nation shared currency strengthened 0.3 percent to $1.3126 at 9:45 a.m. London time. The Aussie slid to its weakest level against the dollar since October 2011. Standard & Poor’s 500 Index futures added 0.3 percent and the Stoxx Europe 600 Index advanced 0.2 percent. Spain’s 10-year yield rose four basis points to 4.48 percent after the nation auctioned 4.02 billion euros ($5.3 billion) of debt, matching it maximum target of 4 billion euros. Copper fell 1 percent.
ECB policy makers will leave their benchmark rate at 0.5 percent today, according to all but two of 59 economists in a Bloomberg survey. U.S. data this week is forecast to show the number of applications for unemployment benefits fell and payrolls increased, bolstering concern that the Federal Reserve may begin scaling back stimulus. A private report yesterday showed U.S. companies hired fewer workers than projected.
“The last two weeks are a reminder of just how important liquidity is to the health of markets around the globe,” Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a research note. “We’ve moved into a new phase where the perception of unconditional liquidity has been replaced by the belief that we might only be a few good data points away from the Fed taking a step back. Tomorrow’s payrolls number kicks off a summer of high impact data.”
Aussie Weakens
Australia’s dollar weakened against all of its 16 major peers after a report showed the nation’s trade surplus narrowed. It declined 0.5 percent to 94.93 U.S. cents and touched 94.35, a level unseen since October 2011.
The yen weakened less than 0.1 percent to 99.12 per dollar. Sterling strengthened 0.3 percent to $1.5451. The Dollar Index fell as much as 0.3 percent to the lowest level since May 9.
RSA Insurance Group Plc advanced 2.3 percent as Morgan Stanley upgraded its rating of the shares. Barclays Plc lost 2.4 percent as an investor sold a stake in the lender.
Markets in Paris, Amsterdam, Brussels and Lisbon opened an hour later than usual as NYSE Euronext, the operator of the exchanges, faced a technical glitch. Trading in Stockholm is closed for Sweden’s National Day holiday.
The gain in U.S. equity-index futures indicated the S&P 500 will rebound from a one-month low.
Emerging Markets
The MSCI Emerging Markets Index fell 0.5 percent to six-month low. The Shanghai Composite Index slid 1.3 percent to a three-week low year, as money-market rates jumped before a three-day holiday next week. The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong dropped for a seventh day the longest losing streak in a year.
Benchmark gauges in Taiwan and Thailand slipped more than 1 percent. Russia’s dollar-denominated RTS index added less than 0.1 percent after entering a bear market yesterday.
Copper dropped for the first time in four days, to $7,382.75 a metric ton. U.K. natural gas slumped 1.5 percent to a five-month low on warm weather.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Jae Hur in Tokyo at jhur1@bloomberg.net;
To contact the editor responsible for this story: Stuart Wallace at Swallace6@bloomberg.net
