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Euro hits one-month low, stocks drop after EU vote: Markets Wrap

In Business
June 10, 2024

(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.

U.S. Federal Reserve Chair Jerome Powell attends a press conference in Washington, D.C., the United States, on May 1, 2024. The U.S. Federal Reserve on Wednesday left interest rates unchanged at a 22-year high of 5.25 percent to 5.5 percent as recent consumer data indicates that inflation continued to tick up. (Photo by Liu Jie/Xinhua via Getty Images)

Federal Reserve Chair Jerome Powell. ( Liu Jie/Xinhua via Getty Images) (Xinhua News Agency via Getty Images)

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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