The euro traded near a two-month high against the dollar and Asian stocks fell before European leaders hold talks to address the debt crisis. Soybeans rallied amid a U.S. drought.
The euro added 0.2 percent versus the greenback and climbed 0.3 percent against the yen at 1:02 p.m. in Tokyo. The MSCI Asia Pacific Index (MXAP) slid 0.4 percent. Futures on the Standard & Poor’s 500 Index added 0.1 percent. U.S. markets were closed yesterday for the Labor Day holiday. Soybeans climbed 1.6 percent, headed to an all-time high, as trade restarted in Chicago, while corn and wheat also rallied.
Data today may indicate U.S. factory activity teetered between growing and shrinking. Reports yesterday showed euro-area and Chinese manufacturing contracted. Photographer: Tomohiro Ohsumi/Bloomberg
European leaders are stepping up diplomatic efforts this week as they await a policy meeting of the region’s central bank on Sept. 6. The European Union’s credit-rating outlook was cut to negative by Moody’s Investors Service. Data today may indicate U.S. factory activity teetered between growing and shrinking after reports yesterday showed euro-area and Chinese manufacturing contracted.
The European Central Bank “is more likely to trigger action when they meet” in two days, said Matthew Sherwood, Sydney-based head of markets research at Perpetual Investments, which manages about $25 billion. “Whether it’s comprehensive enough to keep sentiment strong and keep markets rallying is a different issue because in the end there’s not much central banks can do to address the global debt situation.”
The MSCI All-Country World Index climbed 11 percent from this year’s low on June 4 through yesterday after ECB President Mario Draghi said that month officials were ready to act amid a worsening outlook for the euro region’s growth.
Europe Meetings
About 11 stocks declined for every seven that advanced on the MSCI Asia Pacific Index today. The Hang Seng China Enteprises Index (HSCEI) slumped 0.7 percent to a six-week low in Hong Kong after Goldman Sachs Group Inc. cut its earnings growth estimates for Chinese listed companies.
Australia’s S&P/ASX 200 Index dropped 0.5 percent as the Reserve Bank meets today.Fortescue Metals Group Ltd. (FMG), the nation’s third-biggest iron-ore producer, retreated 1.4 percent in Sydney after lowering its full-year capital spending forecast by 26 percent.
EU President Herman Van Rompuy is traveling to Berlin for talks with German Chancellor Angela Merkel today as Italian Prime Minister Mario Monti welcomes French President Francois Hollande to Rome. Draghi said yesterday that he would be comfortable buying bonds with maturities of up to about three years, a member of the European Parliament said after closed- door meetings.
The euro strengthened 0.2 percent to $1.2618, after it reached $1.2638 on Aug. 31, the highest since July 2. The shared currency advanced 0.3 percent to 98.85 yen.
Soybeans Rally
After the ECB meets this week, Germany’s Constitutional Court will rule on the legality of a bailout fund, Greece’s institutional creditors will decide if the country merits access to aid to help it stay in the European Union, and Dutch citizens vote on parties including a group that wants exit the bloc.
The Institute for Supply Management’s manufacturing index was probably at 50 in August, according to the median estimate of economists surveyed by Bloomberg News. It was at 49.8 in July, below the level of 50 that marks the dividing line between expansion and contraction.
Soybeans for delivery in November gained 1.6 percent to $17.85 a bushel on the Chicago Board of Trade. Soybeans have rallied 48 percent this year as the worst U.S. drought in more than a half a century hurt yields. That’s the biggest gain on the Standard & Poor’s GSCI Spot Index of 24 raw materials. Corn gained 1.1 percent to $8.0825 a bushel, and wheat advanced 1 percent to $8.98 a bushel.
Domestic soybean prices in China, the largest importer advanced this week to the highest level since 2008, on concern that supplies from the U.S., the biggest grower, will decline. The oilseed is crushed to make animal feed and cooking oil in the world’s most populous nation.
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