The euro weakened after Greece told creditors to lower demands that are holding up bailout funds. Emerging-market stocks fell as speculation grew the U.S. was moving closer to raising interest rates, while Poland’s zloty slid to a two-month low and Spanish markets dropped.
Europe’s shared currency declined 0.4 percent to $1.0972 at 10:35 a.m. in London. The MSCI Emerging Markets Index lost 0.6 percent. Poland’s zloty retreated after an opposition candidate won the presidency, while Spanish stocks and bonds fell as local elections showed support for parties seeking to overturn the political status quo. Chinese shares jumped to a seven-year high. The Stoxx Europe 600 Index and Standard & Poor’s 500 Index futures were little changed. The Bloomberg Dollar Spot Index rose for a second to a one-month high. Markets in the U.S., U.K. and Hong Kong were among those closed on Monday.
Greek Prime Minister Alexis Tsipras said over the weekend the country can’t accept crushing austerity, while Interior Minister Nikos Voutsis, who has no economic decision-making powers, went so far as to say Greece couldn’t and wouldn’t pay the International Monetary Fund in June without a deal. Federal Reserve Chair Janet Yellen said on Friday she expected to raise interest rates this year after a report showed core inflation climbed more than forecast in April.
“There is ongoing euro negativity in the light of the Greek comments about the June 5 payment, while markets consider the dollar in the light of the Yellen warnings on rates on Friday,” said Jeremy Stretch, the head of currency strategy at Canadian Imperial Bank of Commerce in London. “It should be relatively quiet in view of the lack of data and market liquidity.”
The euro declined against 13 of its 16 major peers. Bloomberg’s dollar gauge advanced 0.1 percent after jumping 2.6 percent last week.
The Stoxx 600 was little changed after its biggest weekly gain since mid-April. Trading volume was 79 percent lower than the 30-day average on Monday, according to data compiled by Bloomberg. Greece’s ASE Index lost 1.6 percent.
Spain’s IBEX 35 Index fell 1.7 percent and the yield on the government’s 10-year bond jumped six basis points to 1.84 percent. Prime Minister Mariano Rajoy’s People’s Party suffered its worst result in a municipal election in 24 years, with the anti-austerity party Podemos claiming its biggest victory in Barcelona.
Polish stocks led declines in emerging markets after opposition candidate Andrzej Duda defeated Bronislaw Komorowski in a presidential runoff, setting up a showdown for a fall parliamentary election that may unseat one of Europe’s most economically successful governments.
The WIG20 Index of equities fell 1.2 percent in Warsaw, heading for a five-week low, and the zloty slipped 0.2 percent against the euro.
The Shanghai Composite Index climbed 3.4 percent, extending last week’s 8.1 percent advance. China and Hong Kong will start cross-border sales of funds on July 1, widening access to financial markets and capital in the world’s second-largest economy, China’s securities regulator said on Friday.
West Texas Intermediate crude oil for July delivery fell 0.5 percent to $59.41 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude for the same month slipped 0.4 percent to $65.13.
U.S. natural gas fell for a second day, dropping as much as 1.7 percent in electronic trading on Nymex to the lowest since May 12.
Palladium for immediate delivery fell 1.1 percent to $781.37 an ounce in London trading, retreating for the first time in four sessions.