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(Bloomberg) — The euro fell to its lowest in a month after French President Emmanuel Macron called a legislative vote in the wake of suffering a crushing defeat in the European Parliament election.
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The common currency dropped 0.4%, retreating alongside European equities and French bonds. BNP Paribas SA and Societe Generale SA tumbled more than 5%.
Gains for French far-right in the vote for European lawmakers prompted Macron to call the snap election as he seeks to halt the rise of his rival, Marine Le Pen. While German Chancellor Olaf Scholz also suffered humiliating losses, centrists parties across the bloc mostly held ground.
The euro was already on the backfoot heading into the week after suffering its biggest loss in almost two months on Friday as stronger-than-expected US jobs data lifted the dollar. Focus will now turn toward Federal Reserve policymakers updating their rates forecast on Wednesday, with traders being less optimistic about the prospects for policy easing.
The impact of the European elections on the euro “will remain short-lived but a hawkish Fed outcome this Wednesday could prove harder to shake off,” Ipek Ozkardeskaya, an analyst at Swissquote Bank, said in a note on Monday.
Meanwhile, the dollar edged higher while US equity futures contracts held steady. The yield on 10-year Treasuries advanced for a third day.
MSCI’s Asia-Pacific stock index was slightly lower, while traders were also focused on India as Prime Minister Narendra Modi is set to outline portfolios for his cabinet later Monday.
Some key events this week:
UK jobless claims, unemployment, Tuesday
China CPI, PPI Wednesday
Thailand rate decision, Wednesday
India CPI, industrial production, Wednesday
UK monthly GDP, Wednesday
US mortgage applications, CPI, Wednesday
FOMC decision, quarterly summary of economic projections, Fed Chair Jerome Powell’s press conference, Wednesday
Australia unemployment, Thursday
Eurozone industrial production, Thursday
US jobless claims, PPI, Thursday
New York Fed’s John Williams moderates discussion with US Treasury Secretary Janet Yellen, Thursday
Tesla annual meeting, Thursday
Japan rate decision, Friday
U. of Michigan consumer sentiment, Friday
Chicago Fed’s Austan Goolsbee, Fed Governor Lisa Cook, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.6% as of 8:22 a.m. London time
S&P 500 futures fell 0.1%
Nasdaq 100 futures fell 0.1%
Futures on the Dow Jones Industrial Average fell 0.2%
The MSCI Asia Pacific Index was little changed
The MSCI Emerging Markets Index fell 0.3%
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro fell 0.4% to $1.0756
The Japanese yen fell 0.2% to 157.06 per dollar
The offshore yuan was little changed at 7.2688 per dollar
The British pound was little changed at $1.2712
Cryptocurrencies
Bitcoin fell 0.4% to $69,432.68
Ether fell 0.7% to $3,672.7
Bonds
The yield on 10-year Treasuries advanced three basis points to 4.46%
Germany’s 10-year yield advanced two basis points to 2.64%
Britain’s 10-year yield advanced three basis points to 4.30%
Commodities
This story was produced with the assistance of Bloomberg Automation.
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