Gold Silver Reports ~ Crude oil fell, extending declines below $40 a barrel as the dollar reasserted itself following last week’s selloff and data showed the first increase this year in the number of U.S. rigs. Australian stocks swung between gains and losses.
♦ West Texas Intermediate oil neared $39, after its retreat on Friday with industrial metals knocked the Bloomberg Commodity Index from a three-month high. The New Zealand dollar weakened with Canada’s currency and Australia’s dollar flirted with a a second day of declines after the greenback snapped a slump Friday that was sparked by the Federal Reserve paring its interest-rate outlook for 2016. Shares in Sydney fluctuated as futures in Hong Kong and Korea signaled gains. Markets in Japan are closed Monday for a holiday.
♦ More than $4 trillion has been added to the value of global equities this month as stimulus efforts from central banks couple with an oil-driven rally in commodities to burnish investor sentiment. The Standard & Poor’s 500 Index returned to levels last seen at the end of 2015 on Friday, erasing its worst ever start to a year, while signs policy makers will continue to support economies with unprecedented easing helped propel developing-country stocks more than 20 percent higher from a low reached in January. China said Friday it will loosen controls around margin trading, a sign concern over stock-market volatility there has faded.
♦ “The policy actions among major global central banks over the past three weeks certainly appears to be coordinated and has helped ease fears about weakening global activity and its contagion into risk assets,” Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney, which manages about $21 billion, said in an e-mail to clients. “However, investors need to be cautious not to extrapolate recent returns, and the speed of the market recovery, indefinitely into market returns from here.”
♦ China reports on commodity imports Monday, and Taiwan updates export data. New Zealand posts figures on credit-card spending and Hong Kong reports on consumer prices.
♦ WTI futures fell 0.8 percent to $39.11 a barrel as of 8:47 a.m. Tokyo time, after sliding 1.9 percent on Friday to trim its fifth straight weekly advance to 2.4 percent. Brent crude lost 0.3 percent to $41.08 after falling 0.8 percent at the end of last week.
♦ Rigs targeting oil in U.S. fields rose by 1 to 387 last week, Baker Hughes Inc. said on its website Friday, the first increase of 2016. The prior week’s number was the lowest since December 2009. The greenback’s stabilization has also unsettled oil, which is priced in the U.S. currency, along with a number of other commodities.
♦ Copper futures for May delivery also dropped, slipping 0.2 percent in a second day of losses, to $2.2775 a pound. Nickel led base metals lower on Friday, sinking 2.6 percent in London as copper fell 0.5 percent.
♦ Gold for immediate delivery also retreating, declining 0.2 percent early Monday to $1,253.03 an ounce, following two days of declines.
♦ About 130 stocks rose as 56 fell on Australia’s S&P/ASX 200 Index, which was up 0.1 percent after earlier falling that amount. New Zealand’s S&P/NZX 50 Index gained 0.3 percent.
♦ Futures on the Kospi index in Seoul were up 0.5 percent in Friday trading, as those on Hong Kong’s Hang Seng Index gained 1.1 percent. Contracts on the Hang Seng China Enterprises Index, a gauge of mainland shares listed in the city, jumped 1.2 percent late on Friday. FTSE China A50 Index futures climbed 0.6 percent.
♦ Commentary from some of China’s top leaders at the weekend indicated senior policy makers are aware of and concerned about the surge in leverage there. People’s Bank of China Governor Zhou Xiaochuan and Vice Premier Zhang Gaoli indicated at the annual China Development Forum in Beijing that they think overall lending in Asia’s largest economy is too high, just days after the national legislature said their top priority was securing annual growth of at least 6.5 percent.
♦ The move on margin lending in the equity market will see interest rates on such debt cut to as low as 3 percent. Speculation the shift was coming fueled a record weekly jump in the small-cap dominated ChiNext Index last week.
“The correlation between margin lending and Chinese equities is highly correlated – this will be positive,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., said in an e-mail to clients.
♦ Futures on the S&P 500 were down less than 0.1 percent early Monday, after the U.S. benchmark rose 0.4 percent on Friday, bringing its fifth straight weekly gain to 1.4 percent. Nasdaq 100 Index futures fell 0.1 percent.
♦ The kiwi weakened 0.4 percent, while the Loonie was down at least 0.2 percent with South Africa’s rand. The Aussie slipped 0.2 percent to 75.94 U.S. cents in the wake of its third straight weekly gain.
♦ Which tracks the greenback against 10 major peers, was little changed after rallying 0.3 percent on Friday to pare its retreat in the week. ~ Neal Bhai Reports