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Cape Town - The dollar extended its gains in the wake of better-than-expected US jobs data, while the euro also rose following its slump on Friday. Crude dropped as major producers gathered to discuss participation in output cuts.
The greenback initially struggled to maintain its positive momentum against G-10 peers, before gradually strengthening as US stock futures also edged higher.
European equities slipped after a report showed German industrial data unexpectedly fell in June, with declines in travel and leisure shares offsetting advances for ArcelorMittal and Anglo American after iron ore and steel prices climbed. West Texas Crude futures dipped below $49 a barrel as producers gathered in Abu Dhabi.
The euro’s continued resilience is a testament to growing investor confidence in the growth story of the European Union amid disappointment over US President Donald Trump’s failure get tax reform and infrastructure spending plans off the ground.
Monday’s report from Germany is unlikely to mark a turning point for either the nation’s economy or the wider bloc, which has successfully navigated a series of political challenges while expansion accelerates.
“I’m maxing on the euro at $1.20 at the moment, and I’m happy for it to be poodling along for a little while until something new and different comes long,” David Bloom, global head of currency strategy at HSBC, said in an interview with Bloomberg TV. “It could be tax reform in the US.”
Among the key events looming this week:
• Representatives from OPEC and non-member nations meet in Abu Dhabi today to discuss supply cut compliance, which fell to 86% in July.
It’s a week of industrial data in Europe.
• UK factory output for June is due Thursday.
• After Monday’s industrial production for Germany, Italy is on Wednesday and France on Friday.
• Kenya holds a presidential election starting Tuesday with President Uhuru Kenyatta challenged by former Prime Minister Raila Odinga.
• Among a number of Fed speakers this week, keep a keen ear out for comments by New York Fed boss Bill Dudley on Thursday.
• President Jacob Zuma faces a no-confidence vote.
• Dutch Prime Minister Mark Rutte resumes talks to form a coalition government on Wednesday.
• The Fed’s inflation puzzle means Friday’s CPI data in the US will get close attention.
• Argentina, Mexico, New Zealand, Peru, the Philippines, Serbia and Zambia set monetary policy.
Here are the main moves in markets:
Stocks
• The Stoxx Europe 600 Index dipped 0.2% to 381.69 as of 15:12.
• The UK’s FTSE 100 Index climbed 0.2% to the highest in more than seven weeks.
• Germany’s DAX Index sank 0.4%.
• The MSCI All-Country World Index advanced 0.1%.
• Futures on the S&P 500 Index gained 0.1%.
Currencies
• The Bloomberg Dollar Spot Index advanced 0.1% to 1 162.13.
• The euro increased 0.2% to $1.1792.
• The British pound fell 0.1% to $1.3024, the weakest in more than a week.
Bonds
• The yield on 10-year Treasuries advanced one basis point to 2.27%.
• Germany’s 10-year yield gained one basis point to 0.48%.
• Britain’s 10-year yield decreased two basis points to 1.155%.
Commodities
• West Texas Intermediate crude dipped 1.2% to $49.00 a barrel.
• Gold declined 0.2% to $1 256.94 an ounce.
• Copper advanced 0.3% to $2.90 a pound, the highest in more than two years.
Asia
• Japan’s Topix index rose 0.5%.
• Toyota jumped 2% after it beat first-quarter profit estimates and raised its full-year forecast on Friday.
• The S&P/ASX 200 Index in Sydney was up 0.9% with miners and banks advancing.
• South Korea’s Kospi index gained 0.1%.
• In Hong Kong, the Hang Seng Index rose 0.5%.
• The MSCI Asia-Pacific Index added 0.4% to trade near to its highest since December 2007.
• The Japanese yen decreased 0.2% to ¥110.86/$.
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