The Bloomberg Commodity Index rose to a two-month high, spurring gains in currencies of resource-rich countries, and shares in China jumped after a pledge to boost shantytown redevelopment fueled speculation more stimulus would follow.
Oil and zinc fueled a third day of gains for commodities and the yuan jumped the most since March. The rand and ruble strengthened, and New Zealand’s dollar reached a 10-week high. Stocks in Europe halted a six-day run of gains, even as mining companies rose, and RWE AG and EON SE surged the most since 2008 after Germany said utilities have enough funds to pay for nuclear-power closures. The Turkish lira fell as much as 1.8 percent following a terrorist attack that killed at least 97 people at a peace rally.
Speculation that China’s central bank will cut interest rates or reserve-requirement ratios has increased before data this week that will probably show slowing exports and decelerating inflation. Federal Reserve Vice Chairman Stanley Fischer also said U.S. policy makers are monitoring labor conditions and the international situation as they assess whether to go ahead with a potential rate increase this year.
“Investors’ risk appetite is continuously getting higher,” said Christy Tan, head of markets strategy at National Australia Bank Ltd. in Hong Kong. It’s not clear “how long this can continue because China’s economic fundamentals are still quite weak.”
Commodities
Bloomberg’s commodity index climbed 0.5 percent as of 6:47 a.m. in New York. Oil futures rose as much as 1 percent to $50.13 per barrel in the city as Abdalla Salem El-Badri, the secretary-general of the Organization of Petroleum Exporting Countries, said demand will grow and non-OPEC supply will contract.
Gold for immediate delivery rose to the highest level since Aug. 24, climbing 0.7 percent to $1,164.88 per ounce. Zinc gained 1.9 percent in London and copper rose 0.8 percent.Nickel advanced a fifth straight day in its longest rising streak since July 2014, increasing 2 percent to $10,710 a ton.
Stocks
The Stoxx Europe 600 Indexfell 0.2 percent, set to end its longest winning streak since July. Automakers bucked the decline on speculation China’s stimulus measures may boost car demand. Standard & Poor’s 500 Index E-mini futures were little changed, following the strongest week for U.S. equities this year. Trading volume may be low in the U.S. on Monday because of the Columbus Day federal holiday.
RWE surged as much as 15 percent and EON climbed as much as 12 percent after Germany’s economy ministry said local utilities have enough funds to pay for the shutdown and cleanup of nuclear power plants as decommissioning moves a step closer.
EMC Corp. jumped 7.7 percent in early New York trading after a person familiar with the matter said Dell Inc. is set to announce as soon as Monday that it’s acquiring the data-storage provider.
Glencore Plc fell 1.2 percent, reversing a gain of as much as 4 percent, after saying it’s in talks to sell two copper mines in Australia and Chile. The commodity trader and miner is seeking to cut its $30 billion debt load by a third amid a rout in commodity prices.
Emerging Markets
The MSCI Emerging Markets Index gained 0.7 percent, heading for its highest close since Aug. 11. Russia’s ruble climbed 0.5 percent versus the dollar, as oil advanced.
The Shanghai Composite Index jumped 3.3 percent and the Hang Seng China Enterprises Index advanced 1.3 percent. The People’s Bank of China announced over the weekend it will expand a relending trial to nine more cities and provinces, while Premier Li Keqiang said the government will increase fiscal support for shantytown redevelopment.
The Shanghai Composite Index is rallying amid stimulus speculation following the National Day holidays.
Bloomberg
The yuan strengthened 0.35 percent, the most since March, as the central bank raised its fixing and signaled support for the currency. Taiwan’s dollar rose 0.9 percent, the biggest gain in more than four years, tracking the yuan. China is the island’s largest export market.
Turkish bonds fell, sending the yield on two-year notes 10 basis points higher to 10.55 percent. The bombing in Ankara on Saturday marked an escalation in violence before parliamentary elections in November. The country is in the throes of deepening domestic unrest and the spillover from a worsening war in neighboring Syria.
Bonds
Germany’s 10-year bund yield fell three basis points to 0.59 percent, after climbing 11 basis points last week. The yield on similar-maturity Spanish and Italian bonds dropped two basis points.
All of the region’s five largest economies are due to hold bond sales this week and Portugal is set to auction bonds for the first time since July. The supply is close to 30 billion euros ($34 billion), almost 50 percent above the year-to-date weekly average, according to Commerzbank AG, which is ranked first among dealers by Germany’s debt agency.
U.S. bond markets are closed Monday for Columbus Day.
Currencies
The New Zealand dollar added 0.4 percent to 67.14 U.S. cents after touching 67.39 cents, the highest since July. The South African rand rose 0.3 percent.
A gauge of the U.S. currency touched a three-week low even after Fischer became the latest policy maker to back the case for a year-end increase in the nation’s benchmark rate, joining William C. Dudley, Dennis Lockhart and John Williams.
The Bloomberg Dollar Spot Index, which measures the currency against 10 major counterparts, slipped 0.2 percent, after touching the lowest since Sept. 18. The U.S. currency weakened 0.2 percent to $1.1382 per euro and depreciated 0.1 percent to 120.11 yen.
source: Bloomberg
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