Stocks Gain as Copper, Gold Climb to Record Highs: Markets Wrap

(Bloomberg) — Asian stocks rose with European equity futures, as copper and gold prices at record highs boosted commodity-related firms. The rally was also supported by expectations for eventual Federal Reserve interest-rate cuts.

Most Read from Bloomberg

The MSCI AC Asia Pacific Index advanced for a seventh day, with the materials sector posting the biggest percentage increase. Equity gauges for Japan, China, Hong Kong and Australia all marched higher, and futures for European and the US pointed to gains.

The timing of the Fed’s likely pivot to rate cuts has shaped trading across financial markets in recent days. The Dow Jones Industrial Average of blue chips closed above 40,000 for the first time on Friday, and optimism about US easing helped gold surge to an all-time high on Monday. Resilient corporate earnings have helped bolster sentiment.

Investors are keeping an eye on the Middle East after Iranian President Ebrahim Raisi and the nation’s Foreign Minister died in a helicopter crash.

“Copper hit a record high and other commodity prices are strong so the market is playing the theme of a recovery in the global economy,” said Yuya Fukue, a trader at Rheos Capital Works Inc. in Tokyo.

Bloomberg’s dollar index edged lower after dropping last week when data showed US inflation eased more in April than economists expected. A number of Fed officials are due to speak this week, including Governor Christopher Waller who is set to talk specifically about the US economy and monetary policy.

Copper surged to its highest-ever level, extending a months-long rally driven by investors who’ve piled into the market in anticipation of deepening supply shortages. Futures on the London Metal Exchange jumped past $11,000 for the first time.

Developments in the Middle East have the potential to spur haven demand, even though oil posted only slight gains on Monday.

The Iranian president’s death comes at a time of turmoil in the Middle East as the war in Gaza between Israel and Hamas rages. The conflict has edged Iran, which backs the Islamist militant group, and Israel closer to all-out conflict. Raisi was seen as a favorite to eventually succeed Supreme Leader Ayatollah Ali Khamenei, who is the Islamic Republic’s top authority.

Saudi Arabia’s King Salman Bin Abdulaziz will receive treatment for a lung condition, according to the state-run Saudi Press Agency. King Salman has led the world’s largest oil exporter since 2015. His son Crown Prince Mohammed bin Salman was set to meet Prime Minister Fumio Kishida, Japan’s government spokesman said the trip had been postponed.

Story continues

“While risk sentiment seems positive in Asia morning there could still be lingering fear that tensions in the Middle East could worsen and that can keep the crude prices a tad underpinned for now,” Maybank analysts including Saktiandi Supaat and Fiona Lim wrote in a note.

The week’s agenda includes economic activity readings in Europe as well as inflation prints in the UK, Canada and Japan. Policy decisions in New Zealand, Indonesia, South Korea and Chile are also due, while Nvidia Corp. is set to report earnings.

Some key events this week:

• BOE Deputy Governor Ben Broadbent speaks on monetary policy transmission, Monday

• Chile GDP, Monday

• Reserve Bank of Australia issues minutes of May policy meeting, Tuesday

• Canada CPI, Tuesday

• Fed Governor Christopher Waller speaks on the US economy and monetary policy, Tuesday

• BOE Governor Andrew Bailey delivers a lecture, Tuesday

• New Zealand rate decision, Wednesday

• Indonesia rate decision, Wednesday

• South Africa CPI, Wednesday

• UK CPI, Wednesday

• FOMC minutes from April 30-May 1 policy meeting, Wednesday

• Singapore CPI, GDP, Thursday

• South Korea rate decision, Thursday

• India S&P Global Manufacturing & Services PMI, Thursday

• Eurozone S&P Global Services PMI, S&P Global Manufacturing PMI, consumer confidence, Thursday

• US new home sales, initial jobless claims, Thursday

• Chile rate decision, Thursday

• Japan CPI, Friday

• Germany GDP, Friday

• Malaysia CPI, Friday

• US durable goods, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.2% as of 6:29 a.m. London time

• Nasdaq 100 futures rose 0.2%

• Futures on the Dow Jones Industrial Average were little changed

• The MSCI Asia Pacific Index rose 0.4%

• The MSCI Emerging Markets Index rose 0.2%

• S&P 500 futures rose 0.2%

• Japan’s Topix rose 0.7%

• Australia’s S&P/ASX 200 rose 0.7%

• Hong Kong’s Hang Seng rose 0.5%

• The Shanghai Composite rose 0.5%

• Euro Stoxx 50 futures rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro rose 0.1% to $1.0881

• The Japanese yen was little changed at 155.70 per dollar

• The offshore yuan was little changed at 7.2370 per dollar

• The British pound was little changed at $1.2705

Cryptocurrencies

• Bitcoin rose 1.5% to $67,126.05

• Ether rose 1.7% to $3,128.62

Bonds

• The yield on 10-year Treasuries was little changed at 4.41%

• Germany’s 10-year yield advanced six basis points to 2.52%

• Britain’s 10-year yield advanced five basis points to 4.13%

• Australia’s 10-year yield advanced two basis points to 4.23%

Commodities

• Spot gold rose 1% to $2,439.71 an ounce

• West Texas Intermediate crude was little changed

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson, Matthew Burgess and Hideyuki Sano.

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.