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GLOBAL MARKETS-Respite for commodities as dollar wilts, China bounces

* Brent oil stabilises above $50 a barrel after 5 pct drop * Subdued day for European bourses, Wall Street seen down 0.2 pct * Dollar softer after weak data, focus now on payrolls * China stocks bounce 3 pct, copper and other commodities firmer * Aussie rises after RBA tones down currency strength concerns By Marc Jones LONDON, Aug 4 (Reuters) - Investors got a day off from commodity market turmoil on Tuesday, as oil prices steadied at $50 a barrel after a 5 percent drop and metals and Chinese markets were generally calmer.

However, European stocks reversed some of the previous day's gains, Wall Street was expected to fall for a third day and a preference for safety meant German government bonds were back in demand.

The respite for commodities came as a relief though and saw Brent oil, which has slumped more than 20 percent over the last month, climb more than 1 percent.

Copper, seen as a bellwether of global growth, rose from a six-year low after Chinese stocks rebounded by more than 3 percent in Asia. A weaker dollar helped, after another bout of weak U.S. data on Monday and before U.S. jobs data due on Friday.

The Canadian and Australian dollars, both linked to raw materials, got lifts alongside emerging market currencies like Russia's rouble, the South African rand and Brazil's real.

The Aussie dollar was the biggest mover. It rose 1.25 percent to almost a two-week high of $0.7375 after the central bank suggested it was more comfortable with the currency's level following its slide.

Investors lengthened the odds of another cut in the 2 percent cash rate. Interbank futures now imply a 60 percent chance of a move by December, from 72 percent earlier in the day.

"You have had a key shift from the RBA that they don't need to intervene as strongly, so that has triggered a considerable Aussie bounce," said John Hardy, head of FX strategy at Saxo Bank.

"And the (U.S.) dollar view is just flat and we are just waiting for payrolls on Friday. We have had a relatively hawkish set-up from Yellen and co (that interest rates may go up next month) but the rates market just doesn't believe it." The dollar was down about 0.1 percent on the day to 123.90 yen as U.S. trading started. The euro was slightly higher at $1.0958.

On European stock markets, French bank Credit Agricole and German carmaker BMW were among the worst performers after disappointing results. The recent drop in oil prices weighed on energy stocks.

Shares in Greece, which had slumped 16 percent on Monday when they reopened after closing for five weeks, also fell a further 4 percent before a partial recovery.

DATA DEPENDENT In Asian trading, MSCI's broadest index of Asia-Pacific shares outside Japan made late gains. Chinese shares rose for a third day, ending up more than 3 percent . Japan's Nikkei stock index kept losses to 0.14 percent.

Beijing has taken numerous steps to support Chinese share markets after they lost more than 30 percent of their value since peaking in June. It announced a fresh crackdown on speculative trading on Tuesday, but investors were still cautious.

"The market is still very volatile ... investors are likely to be quiet and see what the next step of the government will be," said Patrick Yiu, a director of CASH Asset Management in Hong Kong. "The overall market momentum is not likely to pick up anytime soon and the economy in China is still very weak." Fears of disinflation stemming from the rout in oil prices has led investors to pare bets that the Fed will raise U.S. interest rates as early as September.

Durable goods and factory data are due later and investors are awaiting earnings reports from a batch of companies that includes Walt Disney and Kellogg.

But Friday's employment data is key for markets. They are expected to show the U.S. economy created 225,000 new jobs in July, according to economists polled by Reuters. The unemployment rate is expected to hold steady at 5.3 percent.

"If we get some certainty about the strength of the U.S. economy and the likelihood of policy normalization by the Fed, and if a rate hike seems justifiable, that is positive for sentiment ... because a lot of people have been bracing for this," said Stefan Worrall, director of cash equities at Credit Suisse.

(Editing by Larry King)

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