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Cape Town - The euro headed for its first decline in three days as data showed the region’s economy cooling at the start of a week packed with corporate results and a Federal Reserve rate decision.
Stocks were dragged down for a second day by carmakers amid a collusion probe.
The common currency halted the advance that saw it hit a two-year high after a composite Purchasing Managers’ Index fell in July to a six-month low, while the dollar mostly traded sideways.
US stock futures edged lower, tracking a European drop as authorities said they are studying possible collusion among German automakers. Crude gained as Saudi Arabia said it would make deep cuts to its crude exports in August. Bonds were mixed.
Earnings from industry bellwethers including Amazon.com and GlaxoSmithKline and central bank policy discussions are set to provide the latest tests for the equity bull market, which has propelled the value of shares globally to $78trn.
The eurozone manufacturing figures indicate that gross domestic product is expanding at the weakest pace in six months, adding further doubts about the sustainability of the stock rally at a time when the strong euro is weighing on exporters.
Investors are also bracing for further surprises from Washington after President Donald Trump sought to impose order in his White House in the face of a widening Russia probe.
Senior adviser Jared Kushner confirmed four contacts with Russians during his father-in-law’s presidential campaign and the transition, but he described the encounters as unmemorable. Donald Trump Jr. and former Trump campaign chairperson Paul Manafort will go before Senate committees on Wednesday.
Here are some key events coming up this week:
• The Joint Ministerial Monitoring Committee of OPEC and non-OPEC nations meets in St. Petersburg, Russia on Monday to discuss progress with production cuts.
• Also today, the UK begins post-Brexit trade talks with the US in Washington.
• China posts industrial profits for last month, with early indicators pointing upward.
• Japanese June data also due this week may show sluggish CPI, even amid a tightening labour market and increased household spending.
• The US central bank is expected to make no change to policy on Wednesday with investors and economists parsing the statement for clues on how officials plan to proceed in reducing their massive portfolio.
• The US economy probably gained traction in the second quarter as spending by American consumers picked up after a lull early this year.
• The gross domestic product report follows the two-day Federal Reserve monetary policy meeting.
• Russia, Brazil, Colombia, Turkey and Nigeria announce rate decisions.
• Alphabet and Facebook results are on the calendar this week, as are global banks Deutsche Bank, Nomura, BNP Paribas SA and UBS. Pharma giants like Merck, Roche and Eli Lilly are also due along with McDonald’s, Caterpillar, GM, Ford, Boeing, Royal Dutch Shell, Total and Exxon.
And these are the notable moves in markets:
Stocks
• The Stoxx Europe 600 Index fell 0.3% at 14:52 to the lowest in more than three months on a closing basis.
• The UK’s FTSE 100 Index slumped 0.9% in the largest decrease since June 15.
• Germany’s DAX Index fell 0.4% to the lowest in more than three months.
• The MSCI Emerging Market Index rose 0.3% to the highest in more than two years.
• Futures on the S&P 500 Index fell less than 0.1%. The underlying gauge closed flat on Thursday and on Friday last week.
Currencies
• The euro fell less than 0.1% to $1.1656. The British pound rose 0.3% to $1.3031, the biggest gain in more than a week.
• The Bloomberg Dollar Spot Index dropped less than 0.1% to the lowest in almost 15 months.
• The Japanese yen rose 0.3% to ¥110.82/$ on its fifth straight advance.
Commodities
• Gold added 0.3% to $1 258.32 an ounce, the strongest in a month on a closing basis.
• West Texas Intermediate crude rose 0.9% to $46.16 a barrel.
Bonds
• The yield on 10-year Treasuries was little changed at 2.24%.
• Germany’s 10-year yield fell less than one basis point to 0.502% on its seventh consecutive decline.
• Britain’s 10-year yield rose two basis points to 1.191%.
Asia
• The MSCI Asia Pacific Index edged higher after rallying over the past two weeks to the highest level in more than 10 years.
• Japan’s Topix index slid 0.5%, after dropping as much as 1% earlier in the day.
• Australia’s S&P/ASX 200 Index lost 0.6%.
• The Shanghai Composite Index advanced 0.4% while Hong Kong’s Hang Seng was 0.5% higher.
• India’s Sensex climbed 0.6% to a record.
• The Australian dollar rose 0.4%, trading above 79 US cents ahead of a speech by Reserve Bank of Australia Governor Philip Lowe on Wednesday.
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