Euro slides on France worries as Brazil markets eye rally
SPY•The euro fell as much as 0.8% to a 17-month low of $1.1160 amid concerns about France's finances, while Brazilian stocks were set to rally after Flavio Bolsonaro advanced to a presidential runoff. Investors also reduced expectations of a Federal Reserve rate increase this month after weaker-than-expected U.S. jobs data.
1. France weighs on euro
The euro recovered some ground to trade at $1.1202 after touching a 17-month low of $1.1160. Investors were concerned about France's rising debt and political gridlock; the premium on French 10-year bonds over German debt had surged above 150 basis points on Friday.
2. Brazil stocks eye gains
Brazilian stocks were set to rally after Senator Flavio Bolsonaro outperformed poll predictions in the first round of the presidential election and advanced to a runoff against incumbent Luiz Inacio Lula da Silva. A Brazilian exchange-traded fund listed in Frankfurt rose 15%, while the real was set to strengthen against the dollar.
3. Fed hike bets ease
Weaker-than-expected U.S. labor data prompted investors to largely rule out a Federal Reserve rate increase this month. Markets saw an 18% chance of a hike, down from 64% a week earlier, while a December move remained largely priced in.
