Euro heads for decline as carmakers weigh on stocks

Bloomberg

The euro headed for its first decline in three days as data showed the region’s economy cooling at the start of a week packed with corporate results and a Federal Reserve rate decision. Stocks were dragged down for a second day by carmakers amid a collusion probe.
The common currency halted the advance that saw it hit a two-year high after a composite Purchasing Managers’ Index fell in July to a six-month low, while the US dollar traded sideways. Automakers extended a slump as European Union and German authorities said they are studying possible collusion among German producers. Crude gained as Saudi Arabia said it would make deep cuts to its crude exports in August. Bonds were mixed.
Earnings from industry bellwethers including Amazon.com Inc. and GlaxoSmithKline Plc and central bank policy discussions are set to provide the latest tests for the equity bull market, which has propelled the value of shares globally to $78 trillion. The euro-area manufacturing figures indicate that gross domestic product is expanding at the weakest pace in six months, adding further doubts about the sustainability of the stock rally at a time when the strong euro is weighing on exporters.
Investors are also bracing for further surprises from Washington after President Donald Trump sought to impose order in his White House in the face of a widening Russia probe. Senior adviser Jared Kushner confirmed four contacts with Russians during his father-in-law’s presidential campaign and the transition, but he described the encounters as unmemorable. Donald Trump Jr. and former Trump campaign Chairman Paul Manafort will go before
Senate committees on Wednesday.
The Joint Ministerial Monitoring Committee of OPEC and non-OPEC nations meets in St. Petersburg, Russia on Monday to discuss progress with production cuts.
The US central bank is expected to make no change to policy on Wednesday with investors and economists parsing the statement for clues on how officials plan to proceed in reducing their massive portfolio. The US economy probably gained traction in the second quarter as spending by American consumers picked up after a lull early this year.
The gross domestic product report follows the two-day Federal Reserve monetary policy meeting. Russia, Brazil, Colombia, Turkey and Nigeria announce rate decisions. The Stoxx Europe 600 Index fell 0.4 percent at 8:01 a.m. in New York to the lowest in more than three months on a closing basis. The UK’s FTSE 100 Index slumped 1 percent in the largest decrease since June 15. Germany’s DAX Index fell 0.4 percent to the lowest in more than three months. The MSCI Emerging Market Index rose 0.3 percent to the highest in more than two years. Futures on the S&P 500 Index fell 0.2 percent. The underlying gauge closed flat on Thursday and Friday last week.
The euro fell 0.1 percent to $1.1647. The British pound rose 0.3 percent to $1.3039, the biggest gain in more than a week.