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European stocks falter after Asia rally

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European stocks falter after Asia rally

European shares failed to carry forward a rally from Asia, while U.S. stock futures also headed lower as the surge that handed the S&P 500 Index its best week in five years appeared to fade. The dollar was steady and oil climbed.

 

The Stoxx Europe 600 index fell for the first time in four days as auto and consumer stocks dropped. That contrasted with Asia, where equities built on their best week since September 2016, spurred by a jump in Japanese stocks after the yen weakened. German bunds retreated with most European bonds and the euro fluctuated.

 

According to Bloomberg, European markets were the center of investor attention on Monday as U.S. stocks and Treasuries take a break for Presidents’ Day holiday and markets in Hong Kong and China remain closed for the Lunar New Year. The continent’s equity gauge has trailed its American counterpart since a global selloff earlier this month, partly thanks to a jump in the euro.

 

As the week rolls on the U.S. treasury will open the borrowing floodgates, and it’ll be up to bond traders to signal how much that extra supply will cost American taxpayers. The treasury will pack in auctions totaling $258 billion this week, including record-sized sales of three- and six-month bills. With little in the way of significant economic data on the schedule, the sales will provide the clearest gauge yet of how steeply borrowing costs may rise.

 

In Asia, currency traders saw the yen retreat from a 15-month high even as data showed Japan’s exports and imports grew strongly in January from a year earlier in a sign the economy continues to expand.

 

The Stoxx Europe 600 Index dipped 0.6 per cent. The MSCI World Index of developed countries declined 0.1 per cent as of 4:53 p.m. London time, the first retreat in more than a week.

The MSCI Asia Pacific Index climbed 0.8 per cent, hitting the highest in two weeks with its sixth straight advance. Japan’s Nikkei 225 Stock Average surged 2 per cent to the highest in two weeks. The MSCI Emerging Market Index climbed 0.2 per cent.

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