Euro pummelled by France's debt burden; stocks mixed
SPY•The euro fell to a 17-month low as concerns about France's fiscal position weighed on the currency, while Asian stocks rose after softer US jobs data reduced bets on an October Federal Reserve rate hike.
1. Euro under pressure
The euro fell more than 0.8% to $1.1161 in Asia, its lowest level in 17 months, before recovering to $1.1178. Investors' premium for holding French 10-year bonds over German bonds rose above 150 basis points, while French OAT futures fell 0.23% and German bund futures edged up 0.1%.
2. Fed rate expectations
Asian stocks advanced after September US job growth slowed more than expected and prior months' payrolls were revised sharply lower. The Nikkei rose 2% and MSCI's broadest Asia-Pacific index outside Japan gained 0.9%; investors priced in less than a 20% chance of an October Fed rate hike, down from 64% a week earlier.
3. Other markets
The dollar rose 0.5% against a basket of currencies to 102.39, supported by the euro's decline and elevated US Treasury yields. Brent crude fell 0.5% to $101.75 a barrel, while US crude dropped 0.9% to $90.29.
