Bonds gain, euro slides as data fans growth fears

BLOOMBERG

European bonds gained and the euro plunged versus the dollar after a sharp decline in manufacturing and services gauges from the common-currency region fanned concerns about the faltering global economy.
Stocks were lackluster at the start of a week packed with major central bank policy decisions and corporate earnings, as investors fretted about the magnitude of further interest rate increases and their effect on economic growth. In the euro area, the private-sector economy contracted more than anticipated in July, highlighting the quandary for the European Central Bank as it prepares to raise interest rates.
The data pressured the euro which fell to a two-week low against the dollar, while the yield on German 10-year bonds, the euro-area benchmark, slid as much as seven basis points. Europe’s Stoxx 600 equity gauge fluctuated, with Spanish equities underperforming after an inconclusive outcome in the election.
Traders are positioning for the Fed and the ECB to raise interest rates and to signal whether more hikes are likely after record tightening campaigns. “Market have entered a phase of anxious waiting with two factors coming into play, central banks and earnings,” said Jeanne Asseraf-Bitton, head of research and strategy at BFT IM.
“I’m not sure there will be a lot of surprises coming from the central banks so it’s really earnings that will be key. Valuations are expensive so earnings need to hold, margins need to hold.”
Treasury yields edged lower, while US stock-index futures posted modest gains after the S&P 500 closed flat and the Nasdaq 100 saw continued selling in technology companies following a disappointing batch of results.  Among individual movers in Europe, Philips plunged as much as 7.7% after reporting a drop in order intake. Ryanair Holdings Plc fell after lowering its traffic prediction. Ocado gained more than 10% after the UK robotics company settled a contractual dispute.
In the US, Mattel Inc rose as much as 2.5% in premarket trading after Barbie, a comedy about the company’s famous fashion doll, became the top-grossing picture in US and Canadian cinemas, taking in $155 million in ticket sales. Warner Bros Discovery Inc, the parent of the Hollywood studio that produced the move, also advanced.
Most other Asian stock gauges advanced on Monday, with Japan’s market boosted by a report that Bank of Japan officials see little urgent need to address the side effects of their ultra-loose monetary policy.  The Stoxx Europe 600 was little changed in London. S&P 500 futures rose 0.2%. Nasdaq 100 futures rose 0.2%. Futures on the Dow Jones Industrial Average rose 0.1%. The MSCI Asia Pacific Index was little changed. The MSCI Emerging Markets Index fell 0.4%.
The Bloomberg Dollar Spot Index rose 0.1%. The euro fell 0.5% to $1.1068. The Japanese yen rose 0.2% to 141.50 per dollar. The offshore yuan fell 0.3% to 7.2124 per dollar. The British pound fell 0.3% to $1.2812. Bitcoin fell 1.2% to $29,768.5. Ether fell 1.1% to $1,871.58.
The yield on 10-year Treasuries declined two basis points  to 3.82%. Germany’s 10-year yield declined six basis points  to 2.41%. Britain’s 10-year yield declined eight basis points to 4.20%. Brent crude fell 0.3% to $80.84 a barrel. Spot gold was little changed.