Stocks, Commodities Climb as Trade Optimism Builds: Markets Wrap

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Stocks in Europe advanced after a rally in Asia drove the region’s shares to their highest level since October amid optimism over China’s economic growth and trade talks. Commodities from oil to copper jumped.

The Stoxx Europe 600 closed higher following a choppy morning as gains by telecommunications companies offset declines in carmakers, after President Donald Trump received a report that may be a preliminary step to raising tariffs on auto imports. U.S. equity-index futures were little changed and emerging-market stocks gained following a positive session in Asia, where China’s credit growth helped ease worries of a slowdown in the biggest regional economy and optimism for a trade detente with America boosted risk appetite. Talks resume this week in Washington.

The yen slipped and the dollar held steady, while the euro strengthened despite dovish comments from a European Central Bank governing council member. A gauge of commodities climbed the most since December, with WTI oil futures rising to around $56 a barrel. U.S. exchanges are closed for Presidents’ Day.

Trade continues to dominate global markets as the economic superpowers race to reach a deal that would avert a tariff increase on Chinese goods by March 1, a deadline President Trump has said he may extend. Over the weekend, Trump said the talks have been “very productive.” President Xi Jinping also sounded upbeat, saying the latest round of meetings “achieved important progress.”

Investors may also get further guidance on U.S. monetary policy this week. Minutes from the Federal Reserve’s most recent meeting will likely show how much conviction there was among policy makers to suspend their interest-rate hiking campaign.

Elsewhere, the pound strengthened after seven members of the U.K. Parliament said they’ll stand as independents after quitting the main opposition Labour Party over issues including Brexit and antisemitism.

Here are some key events coming up:

• The Federal Reserve will on Wednesday publish minutes from its recent meeting.
• Bank of Canada Governor Stephen Poloz speaks on Thursday; ECB President Mario Draghi speaks on Friday, the same day Reserve Bank of Australia Governor Philip Lowe gives parliamentary testimony.
• Australia’s central bank releases meeting minutes on Tuesday.
• Indonesia rate decision is due Thursday.

These are the main moves in markets:

Stocks

• The MSCI Emerging Market Index advanced 0.6 percent as of 4 p.m. in New York.
• The Stoxx Europe 600 Index gained 0.2 percent to the highest in almost 19 weeks.
• The Shanghai Composite Index closed up 2.7 percent on the biggest increase in more than 15 weeks.
• The MSCI Asia Pacific Index gained 1.1 percent on the largest rise in more than two weeks.

Currencies

• The Bloomberg Dollar Spot Index declined less than 0.05 percent.
• The euro climbed 0.2 percent.
• The British pound jumped 0.3 percent to the strongest in more than a week.
• The MSCI Emerging Markets Currency Index climbed 0.1 percent to 1,637.89.
• The Brazilian real fell 0.9 percent to 3.7359 per dollar.

Bonds

• Germany’s 10-year yield advanced one basis point to 0.11 percent.
• Britain’s 10-year yield gained one basis point to 1.166 percent.
• Australia’s 10-year yield climbed four basis points to 2.1425 percent.

Commodities

• The Bloomberg Commodity Index gained 1.2 percent to 80.96.
• Iron ore rose 0.3 percent to $86.25 per metric ton.
• West Texas Intermediate crude advanced 0.8 percent to $56.06 a barrel, hitting the highest in three months with its fifth consecutive advance.

--With assistance from Simon Kennedy, Cormac Mullen, Adam Haigh and Francine Lacqua.

To contact the reporters on this story: Todd White in Madrid at twhite2@bloomberg.net;Aline Oyamada in Sao Paulo at aoyamada3@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Yakob Peterseil

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