Euro Drop After Fed Cuts Growth Estimates

Commodities dropped, with a global benchmark declining to the lowest since 2010, while the euro weakened for the first time in three days and Asian stocks fell after the Federal Reserve cut growth estimates and a report showed China’s manufacturing may shrink for an eighth month.

The S&P GSCI Index of 24 raw materials lost 0.9 percent by 12:53 p.m. in Tokyo, extending a 1.9 percent decline yesterday. Oil dropped 1.4 percent to the lowest since October and copper slid 1.3 percent. The euro declined against most of its 16 major peers as the MSCI Asia Pacific (MXAP) Index fell 0.4 percent and Standard & Poor’s 500 Index futures lost 0.3 percent. Japan’s Topix Index added 1.1 percent to a 1.7 percent gain yesterday.

“Even though markets are cheap, we’re not back to a risk- on mode,” said Andrew Pease, Sydney-based chief investment strategist at Russell Investment Group, which manages about $150 billion. “Risks in Europe are not over by a long way.”

The 17-nation euro slid 0.3 percent to $1.2670 from yesterday, when it capped a two-day advance of 1 percent. It fell 0.2 percent to 100.85 yen, after gaining 1.6 percent over the previous two days. Greece’s stock market was put under review for reclassification to emerging markets by MSCI Inc. (MSCI), a change that would make the nation the first advanced country to be cut to developing status. [ News Source ]

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