Global equity markets traded slightly lower and the dollar weakened against the yen yesterday after eurozone business activity for June showed growth slowing, with activity in France contracting at the fastest pace in four months.
Shares on Wall Street fell, capping a six-day rally in the benchmark S&P 500 that pushed it to all-time highs.
Prices of USE32 Treasuries rose even as data on USE32 home resales rose more than expected, suggesting that housing was pulling out of a recent slump, and as a measure of USE32 manufacturing and its key subindexes advanced in June to their highest levels in more than four years.
The eurozone’s private sector expansion unexpectedly slowed even as companies continue to cut prices to drum up business, according to Markit’s Composite Purchasing Managers’ Index (PMI), which fell to 52.8 from May’s 53.5.
In Treasuries, the largest gains were in longer-dated maturities. The benchmark 10-year note rose 6/32 in price, pushing the yield down to 2.6025 per cent.
“Prices are up here mainly because some of the data we got overnight and over the weekend were somewhat on the disappointing side, most notably France,” said Stan Shipley, fixed-income strategist at ISI Group in New York.
German 10-year Bund yields, the benchmark for euro zone borrowing costs, fell three basis points to 1.32 per cent, within reach of the 2014 lows of 1.285 per cent. Other euro zone sovereign 10-year yields also dipped.
Bund futures closed 31 ticks higher at 146.14.
MSCI’s all-country world stock index fell 0.09 per cent, while the FTSEurofirst 300 index of leading European shares closed 0.48 per cent lower at 1,388.34.
The Dow Jones industrial average fell 27.31 points, or 0.16 per cent, to 16,919.77.
The S&P 500 lost 1.33 points, or 0.07 per cent, to 1,961.54, and the Nasdaq Composite dropped 1.203 points, or 0.03 per cent, to 4,366.833.
The euro struggled against the dollar after the softer business-sentiment surveys, while optimism on China’s economic prospects drove the Australian, New Zealand and Canadian dollars higher.
The euro fell 0.04 per cent to $1.3594. Against the yen, the dollar was 0.15 per cent weaker at 101.91 yen.
Brent crude dropped from last week’s nine-month highs as concerns waned that a Sunni Islamist insurgency in Iraq would cut the country’s oil exports.
Brent was down 57 cents at $114.24. USE32 crude for August delivery was down 75 cents at $106.08. The July contract expired on Friday.