Earnings, Spanish downgrades weaken shares, euro
By Marc Jones | October 23, 2012 7:00 PM EST
Lacklustre corporate earnings and a credit rating downgrade of five Spanish regional governments weakened world shares and the euro on Tuesday, while expectations of stimulus in Japan hurt the yen.
The euro was down 0.21 percent at $1.3033 by 0715 GMT. Safe-haven German government bond prices edged higher and nudged up Spanish and Italian 10-year bond yields.
"Moody's cut Catalunya amongst other Spanish regions so there's a bit of bad news out there and we're seeing a bit of a bid for Bunds," one bond trader said.
Spain will sell three and six-month debt later on Tuesday.
Disappointing company results from the United States on Monday, cast a shadow over share markets. Heavy-equipment maker Caterpillar Inc
European shares <.FTEU3>, which ended Monday down 0.4 percent, buckled after an early push to stand 0.2 percent lower. Following falls in Asia, the MSCI index of world shares <.MIWD00000PUS> was down 0.18 percent.
In the currency market the yen hit a three-month low against the dollar and a five-month trough versus the euro on belief that the Bank of Japan will further loosen policy later this month.
"Generally speaking, expectations for a BOJ easing help push the dollar up against the yen, but the effect on the economy from easing is limited. It's more to do with recent market flows which have been pointing to a weaker yen," said Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo.
Several central banks hold policy meeting this week, including the U.S. Federal Reserve, the Bank of Canada and the Reserve Bank of New Zealand. All of them are expected to keep rates on hold but may offer dovish statements, Barclays Capital said in a research note.
(Additional reporting by Emelia Sithole-Matarise; editing by Anna Willard)
Most Popular Slideshows
- Taylor Swift Named Forbes' Second Highest Paid Country Musician [PHOTOS]
- Forever Lost: Indescribable Anguish for Malaysia Airlines MH17 Families, Remains of Some Victims May Never Be Found (PHOTOS)
- Global Aviation Accidents: UN to Form Safety Task Force, Gov'ts Should Share Intelligence Info to Avert Future Incidents on Flying Over Warzones (PHOTOS)
- Lunch with the Gods: Pope Francis Eats with Vatican Workers in Cafeteria
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Samsung Galaxy S5 Alpha Leaks Online: Release Date, Five Features to Wait for New Smart Phone
- Photos of Motorola Moto X+1 Prototype and Specs Leak Online, Release Date, Four Fresh Features Revealed
- Sony Xperia Z3: Release Date, Five Features to Expect from New Android Smart Phone
- 5 Food Scandals That Shocked The World
- Iran Leader Asks Muslims to Supply Arms to Palestine, Calls Israel ‘Rapacious Wolf’
- Nexus 6 Likely Confirmed as Motorola 5.9-Inch Phablet on Release Date – Report
- MH17: Shrapnel Hits Plane, Russia Calls for UN-led Investigation