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 Wall Street looked set to open higher, according to index futures,
after shares rose sharply in Europe and modest gains in Asia.
Brent crude, the international benchmark, fell as far as $38.18, its
lowest since March 4, before recovering to trade up 18 cents at
$38.85.
Prices have fallen from above $100 a barrel since mid-2014 on a
supply glut, troughing at $27.10 in late January. Brent topped
$42.50 last month in anticipation of agreement among producers to
freeze output.
However, last week a Saudi prince reportedly said the kingdom would
only freeze output if Iran and other producers did the same. Iranian
Oil Minister Bijan Zanganeh was quoted as saying at the weekend that
his country would increase production and exports until it reached
the position it occupied before sanctions were imposed over its
nuclear program.
"Prices are coming down because of speculation Saudi Arabia will not
join (the freeze deal) and that's probably what we'll see over the
next three weeks - more speculation and more verbal intervention,"
ABN Amro chief energy economist Hans van Cleef said.
Copper prices, which are also sensitive to the value of the dollar,
hit a one-month low of $4,778.50 a tonne on the U.S. data and
concern about Chinese demand before recovering to $4,805, down 0.6
percent on the day.
Gold fell for the second successive day, dropping about 0.6 percent
to $1,215 an ounce.
The pan-European FTSEurofirst 300 share index rose 1.1 percent, led
higher by defensive stocks such as utilities and healthcare. The
index opened lower on a fall in telecoms stocks after the collapse
on Friday of tie-up talks between Orange and Bouygues.
Britain's FTSE 100 index added 0.8 percent.
Greek stocks , however, fell 1.5 percent after a leaked transcript
detailing mooted IMF bailout negotiation tactics renewed worries
about the country's finances.
WikiLeaks published on Saturday what it said was the transcript of a
conference call of three senior IMF officials, discussing tactics to
put pressure on Greece, Germany and the EU to reach a deal in April.
Greek two-year government bond yields jumped about 2 percentage
points to a one-month high of 11.15 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan earlier
rose 0.1 percent, although many of its components were not traded
due to a holiday in Greater China.
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Japan's Nikkei fell 0.3 percent, led by a fall in automakers
following poor U.S. sales figures.
The dollar rose 0.2 percent against a basket of currencies as
falling commodity-linked currencies such as the New Zealand and
Australian dollars helped the greenback. It edged down to 111.62 yen
but gained 0.2 percent to $1.1366 per euro.
YELLEN
The impact of a report on Friday showing the U.S. economy added
215,000 jobs last month and another showing factory activity
expanded for the first time in six months was offset by Federal
Reserve Chair Janet Yellen saying last week the central bank would
proceed cautiously in raising rates.
"Yellen sent some very powerful messages last week so the extent of
dollar strength on payrolls was limited," said BMO Capital Markets
currency strategist Stephen Gallo.
U.S. Treasury yields, which rose on Friday after the economic
numbers, turned lower on Monday. Ten-year yields were down 2.1 basis
points at 1.77 percent, compared with 1.79 percent at Friday's New
York close.
German 10-year bond yields, the benchmark for euro zone borrowing
costs, dipped 0.4 bps to 0.14 percent.
Some analysts expect 10-year yields to test zero again, as they did
a year ago, as the European Central Bank has increased its monthly
asset purchases to 80 billion euros from 60 billion.
(Additional reporting by Hideyuki Sano in Tokyo, Amanda Cooper,
Jemima Kelly and Marius Zaharia in London; editing by John
Stonestreet)
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