Global Markets: Euro falls on weak German business morale, stocks slip
By Herbert Lash NEW YORK (Reuters) - The euro fell against the U.S. dollar on Wednesday after data showing a surprise deterioration in German business morale stoked fears of slowing global growth and weighed on a gauge of world equity markets. The decline in the Munich-based Ifo economic institute's business climate index bucked expectations for a small improvement and sent U.S
By Herbert Lash
NEW YORK (Reuters) - The euro fell against the U.S. dollar on Wednesday after data showing a surprise deterioration in German business morale stoked fears of slowing global growth and weighed on a gauge of world equity markets.
The decline in the Munich-based Ifo economic institute's business climate index bucked expectations for a small improvement and sent U.S. Treasury yields reeling as investors piled into safe-haven bonds.
Reports of a sharp slowdown in Australian inflation also lifted bond prices, while Premier Li Keqiang in China said authorities should not underestimate the difficulties in the Chinese economy, adding to concerns about global growth.
Signals that China has put broader stimulus on hold curbed demand for European equities and overshadowed strong earnings from Credit Suisse and SAP, which led Germany's DAX index index to close up 0.63% at a six month high.
The 12.6% surge in the German software firm's shares helped technology post its best days since August 2015, but all other major country indexes in Europe closed lower.
The pan-European STOXX 600 index closed down 0.09%, while MSCI's gauge of stock performance in 47 countries fell 0.33%.
Wall Street shrugged off some earnings misses and traded little changed. Boeing Co rose 0.27% after the planemaker reported first-quarter free cash flow that was ahead of many analysts' estimates, helped by improved performance from its 787 Dreamliner programme.
U.S. corporate earnings have been much better than expected and are driving the benchmark S&P 500 and Nasdaq indexes to new highs, though the pace of gains should slow, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
"You're seeing a transition, at least for today," Arone said. "There are some concerns that outside the U.S. global growth continues to be disappointing and that's weighing on shares.
Defensive sectors of the market - REITs, utilities and staples - are leading the way, whereas some of cyclical-oriented shares are struggling with the renewed growth concerns, he said.
The Dow Jones Industrial Average fell 16.39 points, or 0.06%, to 26,640. The S&P 500 lost 0.95 points, or 0.03%, to 2,932.73 and the Nasdaq Composite added 1.86 points, or 0.02%, to 8,122.68.
The dollar index, which measures the U.S. currency against a basket of six major rivals, was up 0.12% at 97.753, its highest since June 2017.
The euro was down 0.75% at $1.1141, while the Japanese yen strengthened 0.4% versus the greenback at 112.31 per dollar.
In a sign of bullish sentiment, the Treasury yield curve continued to steepen, hitting its widest level since November 2018. Benchmark 10-year notes rose 12/32 in price to push their yield down to 2.5253%.
Oil prices steadied near six-month highs after data that showed U.S. stockpiles rose to their highest levels since October 2017. The data countered fears of tight supply resulting from OPEC output cuts and U.S. sanctions on Venezuela and Iran.
U.S. crude inventories rose 5.5 million barrels last week, the Energy Information Administration said, far more than analysts' forecast of an increase of 1.3 million barrels.
Brent crude futures settled up 6 cents to $74.57 a barrel, while U.S. West Texas Intermediate crude futures fell 41 cents to settle at $65.89 a barrel.
U.S. gold futures settled 0.5 percent higher at $1,279.40 an ounce.
(Reporting by Herbert Lash; Editing by Bernadette Baum and Cynthia Osterman)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.