(Bloomberg) — The euro fell to its lowest in a month after French President Emmanuel Macron called for early voting following European elections, while Asian currencies weakened after strong U.S. jobs data on Friday.
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The euro slid along with European stock futures and French government bonds, dropping as much as 0.5%.Far-right forces made expected gains in votes across the European Union, prompting President Macron to call for early legislative votes in France to thwart the rise of his rival Marine Le Pen.
German Chancellor Olaf Scholz’s Social Democrats suffered a record selloff, but German 10-year bond futures recovered from early losses to finish little changed.
“The EU is facing a historically difficult moment, with ‘rifts’ both internally and externally emerging and needing more cooperation, not less,” a client note from Scandinavian Bank Enskilda said. “Heads of state and government now face difficult negotiations.”
Outside of European politics, Monday’s trading was influenced by the US Federal Reserve’s rethinking of interest rate cuts and easing concerns about an economic slowdown following last week’s strong US employment data.
Yields on 10-year government bonds rose for a third straight day, but the South Korean won and Malaysian ringgit weakened. The MSCI Asia Pacific stock index edged lower.Traders also focused on India, with Prime Minister Narendra Modi due to present his cabinet portfolio later on Monday.
Japan’s Topix rose, led by insurers on hopes that rising bond yields will boost profitability. Markets in China, Hong Kong, Taiwan and Australia were closed for public holidays.
The latest U.S. jobs report showed the labor market remains strong, contrary to expectations, and the impact of high interest rates and prices on the economy is slowing.
“We still expect a soft landing in the U.S., and as long as that’s the scenario, I think there’s upside potential for Asian markets,” Lorraine Tang, director of Asia equity research at Morningstar, said on Bloomberg TV on Monday.
Investors may get more information about the Fed’s resolve to ease monetary policy when U.S. policymakers update their interest rate outlook on Wednesday. The Bank of Japan’s next announcement is scheduled for Friday, where economists expect policy to remain on hold.
Oil prices edged up after a weekly decline as markets were still digesting OPEC+’s decision to restore supply, with traders keeping a close eye on a series of industry reports and the Federal Reserve’s interest rate decision.
Also in the Middle East, Benny Gantz resigned from Israel’s emergency government, criticizing Prime Minister Benjamin Netanyahu over his handling of the war with Hamas and calling for elections. Gantz’s resignation removes a moderate voice from the government and leaves Netanyahu more dependent on his right-wing coalition partners.
Major events this week:
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UK jobless claims, unemployment rate on Tuesday
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China CPI, PPI Wednesday
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Thailand interest rate decision Wednesday
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India CPI, industrial production Wednesday
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UK monthly GDP on Wednesday
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U.S. mortgage applications, consumer price index, Wednesday
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FOMC decision, quarterly economic outlook overview, Fed Chairman Jerome Powell’s press conference, Wednesday
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Australian unemployment rate on Thursday
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Eurozone industrial production on Thursday
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U.S. jobless claims, producer price index Thursday
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New York Federal Reserve President John Williams moderated talks with U.S. Treasury Secretary Janet Yellen on Thursday.
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Tesla Annual Meeting, Thursday
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Japan interest rate decision on Friday
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University of Michigan Consumer Sentiment Index, Friday
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Chicago Fed President Austan Goolsbee and Fed President Lisa Cook on Friday
Some of the key market developments:
stock
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S&P 500 futures were little changed as of 6:38 a.m. London time.
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Nasdaq 100 futures little changed
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Dow Jones Industrial Average futures were little changed
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The MSCI Asia Pacific index was little changed
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The MSCI Emerging Markets Index fell 0.3%.
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Japan’s TOPIX rises 0.9%
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Euro Stoxx 50 futures fell 0.4%
currency
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The Bloomberg Dollar Spot Index rose 0.2%.
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The euro fell 0.5% to $1.0748.
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The Japanese yen weakened 0.2% to 157.08 yen per dollar.
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The offshore yuan weakened 0.1% to 7.2712 per dollar.
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The British pound was little changed at 1.2715 to the dollar
Cryptocurrency
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Bitcoin fell 0.2% to $69,571.46.
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Ether fell 0.4% to $3,685.83.
Bonds
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The yield on the 10-year Treasury note rose 1 basis point to 4.45%.
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German 10-year government bond yields rose 7 basis points to 2.62%.
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UK 10-year government bond yields rose 9 basis points to 4.26%.
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Australian 10-year government bond yields were little changed at 4.22%
merchandise
This story was produced with assistance from Bloomberg Automation.
–With assistance from Stephen Kirkland.
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