The euro fell against the majority of its most-traded counterparts after Fitch Ratings cut its rating on Spain and Italy, highlighting the potential for region’s debt crisis to spread.
The 17-nation currency erased gains versus the dollar as Fitch cited factors including vulnerability to the “euro-zone crisis.” The dollar pared losses against the Mexican peso and Australia’s dollar as demand increased for a refuge from the fallout of Europe’s debt crisis. The euro and other higher- yielding currencies gained earlier after a report showed U.S. employers added more jobs than forecast last month.
European stocks gained for a third day, posting a second weekly gain, as a report showed the
U.S. economy added more jobs than economists had estimated.
National benchmark indexes climbed in 12 of the 18 western- European markets. Germany’s DAX Index climbed 0.5 percent and the U.K.’s FTSE 100 Index gained 0.2 percent. France’s CAC 40 Index increased 0.7 percent.
FTSE 100 5,303 +12.14 +0.23%, CAC 40 3,096 +20.19 +0.66%, DAX 5,676 +30.45 +0.54%
BMW and Daimler, the world’s biggest makers of luxury cars, jumped 4.1 percent to 50.89 euros and 1.3 percent to 33.98 euros, respectively. Rio Tinto, the world’s second-largest mining company, rose 1.2 percent to 3,164 pence, while Xstrata Plc climbed 2.7 percent to 910 pence. Copper, lead, tin and zinc all rose on the London Metal Exchange. Continental AG surged 4.9 percent to 46.91 euros as the world’s fourth-largest tiremaker plans to spend more than $500 million to build a new tire factory at Sumter, South Carolina, to meet increasing demand.
Most U.S. stocks retreated as banks declined and faster-than-estimated growth in American jobs failed to support the market following the biggest three-day rally in the Standard & Poor’s 500 Index since August.
Dow 11,091.47 -31.86 -0.29%, Nasdaq 2,472.72 -34.10 -1.36%, S&P 500 1,154.32 -10.65 -0.91%
Financial stocks dropped the most among 10 groups in the S&P 500 after Federal Reserve Bank of Atlanta President Dennis Lockhart said regulators haven’t yet put in place a system that would allow orderly failures of the largest financial firms without taxpayer rescues. Bank of America Corp. and Goldman Sachs Group Inc. lost more than 3.2 percent. Home Depot Inc. and Boeing Co. rallied at least 1.6 percent, pacing gains among companies most-tied to the economy.
GOLD: COMEX prices flattening as traders decide "which hat to wear," one that follows stocks, or one that operates as a safe haven. Dec contract down $1.40 at $1,651.80.
Crude oil increased for a third day in New York after larger-than-forecast U.S. employment growth eased concern that the economy is slowing.
Futures rose as much as 1.7 percent as the Labor Department said payrolls climbed by 103,000 workers in September and 57,000 in August. Oil is headed for the first weekly advance in three as supplies fell and central banks announced stimulus plans.
Crude oil for November delivery rose 1 percent, to $84.00 a barrel on the New York Mercantile Exchange. The contract is heading for a 5.2 percent gain this week. Futures dropped as much as 1 percent to $81.79 before the release of the jobs data.
Brent oil for November settlement gained 9 cents to $105.82 a barrel on the London-based ICE Futures Europe exchange.

U.S. stock-index futures rallied after larger-than-forecast growth in jobs tempered concern that the economy was slowing.
Payrolls climbed by 103,000 workers after a revised 57,000 increase the prior month that was more than originally estimated, Labor Department data showed today in Washington. The median forecast was for a rise of 50,000. The jobless rate held at 9.1 percent.
Before the employment data futures fell as Moody's has downgraded 12 U.K. financial institutions, citing the lowering or removal of government support.
Data:
08:30 UK PPI (Output) (September) unadjusted 0.3%
08:30 UK PPI (Output) (September) unadjusted Y/Y 6.3%
08:30 UK PPI Output ex FDT (September) adjusted 0.3%
08:30 UK PPI Output ex FDT (September) unadjusted Y/Y 3.8%
08:30 UK PPI (Input) (September) adjusted 1.7%
08:30 UK PPI (Input) (September) unadjusted Y/Y 17.5%
10:00 Germany Industrial production (August) seasonally adjusted -1.0% -1.0%
10:00 Germany Industrial production (August) not seasonally adjusted, workday adjusted Y/Y 7.7%
The euro headed for a weekly gain versus the dollar on speculation financial support for European banks will help stem the region’s debt crisis.
The euro rose after the European Central Bank said yesterday it will reintroduce yearlong loans and resume purchases of covered bonds to encourage lending.
The pound rose on optimism the Bank of England’s decision to reactivate its bond-purchase program will help revive the U.K.’s faltering economy.
Losses in the dollar and yen were tempered before U.S. reports today forecast to show a gain in unemployment in September was not enough to bring down the jobless rate.
Employment climbed by 55,000 workers after no change in August, according to the median forecast of economists. The jobless rate was 9.1 percent for a third month, according to the forecasts.
EUR/USD: the pair holds in $1.3400-$ 1,3460 range.

GBP/USD: the pair dore above $1.5500.

USD/JPY: the pair holds in Y76.55-Y76,75 range.

The main focus is on US data at 1230GMT when nonfarm payrolls are forecast to rise 80,000 in September after the flat August reading, but the unemployment rate is expected to rise to 9.2%. An absence of the Verizon strikers should be a key factor in the payrolls rebound. Hourly earnings are seen up 0.2% after see-sawing sharply in the last four months. The average workweek is expected to hold steady at 34.2 September. Wholesale Inventories follow at 1400GMT.




Case for effectiveness of QE 'compelling'.
On Friday UK data starts at 0830GMT with the Producer Price Index for September, which is expected to show output prices higher by 0.2% m/m, 6.3% y/y. The focus is on US data at 1230GMT when nonfarm payrolls are forecast to rise 80,000 in September after the flat August reading, but the unemployment rate is expected to rise to 9.2%
On Friday UK data starts at 0830GMT with the Producer Price Index for September, which is expected to show output prices higher by 0.2% m/m, 6.3% y/y. The focus is on US data at 1230GMT when nonfarm payrolls are forecast to rise 80,000 in September after the flat August reading, but the unemployment rate is expected to rise to 9.2%




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