Euro Falls To The Lowest Since 2003 as Italy Bonds Gain

Euro burnThe euro weakened while Spanish and Italian bonds gained as a gauge of business activity grew less than estimated before the European Central Bank meets to work on details of its bond-buying program. European stocks erased gains and U.S. equity-index futures fell.

Europe’s shared currency slid 0.4 percent to $1.1129 at 10:14 a.m. in London. The yield on 10-year Spanish notes fell two basis points to 1.37 percent and Italy’s rate dropped to 1.38 percent. U.K. 10-year yields rose to the highest this year. The Stoxx Europe 600 Index slipped less than 0.1 percent and Standard & Poor’s 500 Index futures declined 0.3 percent.

While a purchasing managers index for the manufacturing and services industries in the euro area rose to a seven month high, it was less than initially estimated, according to Markit Economics. Investors are looking for Thursday’s ECB meeting for details on its 1.1 trillion-euro ($1.2 trillion) quantitative-easing program announced in January.

“It’s worth noting that the market may want to increase their short-euro exposure ahead of the ECB actually starting their QE program,” said Sam Lynton-Brown, a currency strategist at BNP Paribas SA in London. “While the announcement led to euro weakness, we also think the flow impact of QE is going to be very important.”
U.S. Jobs

Global equities have added almost $5 trillion of market value during the past six months amid a wave of monetary easing and signs of strength in the U.S. economy. A private jobs report from the ADP Research Institute will probably show U.S. companies added more workers to payrolls in February, while the Institute for Supply Management’s non-manufacturing index slipped.

The euro fell against all but one of its 16 major peers. It declined 0.6 percent to 133.04 yen, and fell to a record against New Zealand’s dollar.

Portugal’s bonds rose with Spain’s and Italy’s. The yield on 10-year securities declined five basis points to 1.88 percent, approaching the record 1.739 percent set on Monday.

German 10-year bonds were little changed, with the yield at 0.36 percent. The rate on 10-year gilts increased two basis points to 1.86 percent and touched 1.88 percent, the highest since Dec. 29.

Standard Chartered Plc gained 5.2 percent after saying capital will rise enough to leave the dividend unchanged even after a drop in full-year profit. Total SA advanced 1 percent. ITV Plc added 4.4 percent after saying it plans a special dividend.
Henkel Profit

Henkel AG fell 4.2 percent. The maker of Persil detergent reported fourth-quarter profit that missed analyst predictions as the ruble’s drop held back growth in Russia. It forecast further burdens there this year. Elekta AB slid 9.2 percent as quarterly profit missed projections.

Russia’s Micex slipped 0.8 percent, falling for the first time in three days, and the ruble was little changed. Russia’s services activity shrank for a fifth consecutive month in February, at its fastest rate of decline since March 2009 as demand weakened. A report later this week will probably show inflation climbed to a 13-year high of 16.7 percent.

Ukraine’s hryvnia strengthened 8.1 percent, extending a 9.3 percent advance yesterday. The National Bank of Ukraine raised its refinancing rate to 30 percent from 19.5 percent, effective Wednesday, to “stabilize the situation on the money and lending markets,” Governor Valeriya Gontareva told reporters in Kiev. That’s the highest benchmark among all countries tracked by Fxstay.

The Shanghai Composite Index added 0.6 percent while the Hang Seng China Enterprises Index lost 1.6 percent. as Bank of China Ltd. slid to a three-week low.
China Growth

The Services Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics climbed to 52 last month from January’s 51.8. Premier Li Keqiang is expected to announce a 2015 economic growth goal of about 7 percent on Thursday, when the National People’s Congress starts its annual meeting, down from last year’s 7.5 percent.

Oil rose 0.6 percent and traded above $50 a barrel. Saudi Arabia increased the pricing terms for its Arab Light grade to Asia by the most in three years after the kingdom’s oil minister said last month that demand is growing. U.S. stockpiles probably expanded by 3.95 million barrels last week, according to a Fxstay News survey before an Energy Information Administration report Wednesday.

Copper for delivery in three months on the London Metal Exchange slid 0.4 percent. Gold and silver for immediate delivery were little changed.

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