Euro Falls as Bonds Rise With Stocks; Rupee to Ruble Gain

Frankfurt (May 13)  The euro declined to a five-week low against the dollar and bonds rose with European stocks on speculation the Bundesbank is open to more stimulus. Standard & Poor’s 500 Index futures signaled the gauge will extend a record high while India’s rupee and Russia’s ruble advanced.

The euro slid 0.3 percent to $1.3711 at 6:55 a.m. in New York. The yield on 10-year German bunds dropped two basis points to 1.44 percent. The Stoxx Europe 600 Index gained 0.2 percent and S&P 500 futures rose 0.1 percent. West Texas Intermediate crude jumped 0.7 percent and gold slid 0.2 percent. The rupee was near the strongest level since July and the S&P BSE Sensex Index extended a record as exit polls signaled opposition parties won national elections. The ruble climbed 0.4 percent.

Germany’s central bank is willing to back measures from the European Central Bank next month if staff forecasts show a lower 2016 inflation outlook, the Wall Street Journal reported, citing a person familiar. Stocks swung between gains and losses earlier as earnings from Airbus Group NV and ThyssenKrupp AG beat estimates while German investor confidence fell in May on concern that threats from low inflation to a strong euro may undermine the recovery.

“The euro is falling on a report that Weidmann is saying he’s ready to cut rates if needed,” said Manuel Oliveri, a currency strategist at Credit Agricole SA’s corporate and investment banking unit in London, referring to Bundesbank chief Jens Weidmann. “There’s a lot of focus on Weidmann because, as the Bundesbank president, he’s on the least dovish side when it comes to the ECB. This is supporting the notion that there’s a quite high probability of the ECB acting next month.”

Europe’s shared currency declined against all 16 of its major counterparts, losing 0.2 percent versus the yen.