Euro slips from 3-week high, U.S. stocks close higher ahead of ECB meeting
Oil futures snapped a four-day rally on Tuesday on signs of higher output while the euro slipped from a three-week high ahead of a meeting of the European Central Bank on Thursday.
Wall Street showed slim gains as energy stocks weighed while European stocks were on track for a second day of gains helped by strong German data, and U.S. Treasury yields held in narrow ranges ahead of the ECB meeting.
The euro fell to $1.072 as currency investors focused on the possibility the ECB may take a more hawkish turn, even as it is widely expected to extend its bond purchases.
“The short-term market is still short euros and I think they might be nervous – time to square up a little bit more ahead of the ECB meeting,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.
The S&P 500’s weakest sector was energy, which fell 0.6 percent as oil prices tumbled after data showed crude output rose in virtually every major export region and on news that Saudi Aramco had cut prices to big Asian customers.
The data followed last week’s first OPEC output cut agreement since 2008 and sent Brent oil futures down $1.08 cents to $53.86 a barrel and U.S. crude down $1.23 to $50.56. [O/R]
The Dow Jones industrial average was down 11.39 points, or 0.06 percent, to 19,204.85, the S&P 500 had gained 1.1 points, or 0.05 percent, to 2,205.81 and the Nasdaq Composite had dropped 2.33 points, or 0.04 percent, to 5,306.56.
The FTSEurofirst 300 index rose 0.9 percent, adding to previous gains. Data showed German industrial orders rose at their fastest pace in more than two years, stoking hopes that Europe’s largest economy is set to accelerate.
“The reading was very strong even without large-scale orders and that suggests it’s more than just a flash in the pan,” BayernLB economist Stefan Kipar said of the German data, noting that some firms might have brought orders forward.
Italy’s referendum result was still in focus, with sources telling Reuters that state aid had been prepared for the world’s oldest bank, Banca Monte dei Paschi di Siena, and with the ECB meeting looming.
