Euro pummelled by France's debt burden; stocks mixed
TLT•The euro fell to a 17-month low as concerns about France's debt and political gridlock weighed on the currency, while Asian stocks rose after softer-than-expected US jobs data reduced bets on an October Fed rate hike.
1. Euro and bonds
The euro fell more than 0.8% in Asia to $1.1161, its lowest level in 17 months, before recovering to $1.1178. Investors' premium for holding French 10-year bonds over German debt rose above 150 basis points on Friday, while French bond futures fell 0.23%.
2. Stocks and Fed bets
Asian stocks advanced as investors pared back expectations of a Federal Reserve rate hike this month. Japan's Nikkei rose 2% and MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.9%; markets were pricing in less than a 20% chance of an October 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 elevated US Treasury yields and the euro's decline. Oil prices edged lower, with Brent down 0.5% to $101.75 a barrel and US crude down 0.9% to $90.29.
