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News Link • Economy - International

Euro Drops, Bonds Rise on Trichet Debt Remarks; Brazil, Canada Stocks Fall

• Stephen Kirkland via Bloomberg

The euro ended a three-day winning streak and bonds rose after European Central Bank President Jean-Claude Trichet urged “austerity” measures to contain budget deficits. Oil and stocks in Brazil and Canada declined.

The euro weakened 0.2 percent to $1.2539 at 2:23 p.m. in New York. The yield on 10-year German bunds fell four basis points to 2.54 percent. Crude lost 0.5 percent. Brazil’s Bovespa Index slumped 0.4 percent, and Canada’s S&P/TSX Composite Index dropped 1.2 percent. The Stoxx Europe 600 Index lost 0.3 percent. September futures on the Standard & Poor’s 500 Index fell 0.2 percent during the U.S. holiday. Copper increased for a second day.

Trichet said yesterday he has “no problem with austerity, rigor” as “good budgetary management,” following reports last week that showed U.S. payrolls dropped for the first time this year and factory orders slumped. China’s Premier Wen Jiabao said on July 3 policy makers face increasing “dilemmas” and the government will ensure “steady and relatively fast” growth.

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