|
 The mood among investors in Europe and the United States has been
subdued in the run-up to the second quarter earnings season, and
sales numbers from France-based luxury goods producer LVMH were
poor, helping push European markets 0.3 percent lower in early
trade.
While analysts greeted Italy's plans for a $5 billion resolution
fund to deal with billowing bad debts, that was also not enough to
generate much optimism about European banks as they launch another
round of restructuring.
Metals company Alcoa <AA.N> reported lower profits.
"LVMH's numbers were not that good, and the problem with the Italian
bank fund is that it is not big enough and it risks compromising the
banks that are already in a much better shape," said Francois Savary,
chief investment officer at Geneva-based investment and consultancy
firm Prime Partners.
Asian markets had done better. Japan's Nikkei <.N225> rose more than
1 percent after a rally in the yen against the dollar stalled on
Monday following three weeks of consistent gains.
The more robust performance of oil helped commodities-linked
currencies like the Australian and New Zealand dollars, both up
around half a percent against their U.S. equivalent.
The U.S. dollar index, which measures its strength against a basket
of currencies, fell 0.2 percent to 93.754. The euro was trading back
above $1.14, touching a six-month high on a batch of sales of the
dollar in early trade in London.
The yen dipped 0.2 percent to 108.16 per dollar.
"Oil prices holding above $40 a barrel overnight has got the dollar
on the back foot, more than anything else, so we have the yen and
the dollar at the bottom, and everything else at the top," said
Societe Generale macro strategist Kit Juckes, in London.
[to top of second column] |
"I think dollar/yen will get back to 120 at some point. We might
want to sell it again there, but I think this move is way overdone."
While concerns over tepid global growth and the inability of
policymakers in Europe and Japan to kick-start their economies have
dominated financial markets this year, some of the big risks have
eased along with a fall in the dollar over the past month.
While relieving pressure on developing economies that have borrowed
heavily in dollars, that fall has also helped global commodities
prices to stabilise.
Expectations that oil producers will agree in Doha on Sunday to curb
output kept U.S. crude prices <CLc1> above $40 a barrel. Brent
<LCoc1> popped above $43 to a four-month peak overnight.
(editing by John Stonestreet)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
