Stocks,
dollar and oil cool ahead of Doha meeting
Send a link to a friend
[April 15, 2016]
By Marc Jones
LONDON (Reuters) - Reassuring Chinese GDP
data helped stocks, commodity markets and the dollar consolidate strong
weekly gains on Friday, as the focus turned to a meeting of top oil
producers about a potential output freeze.
|
Moves in most markets were small in Europe but urges to lock in some
profit was beginning to kick in after a 2.5 percent weekly rally in
world shares a strong run by the dollar and an 11 percent surge in
oil prices this month.
European shares edged down 0.4 percent as traders top-sliced some
the 3.5 percent gains they have made this week with Wall Street's
main marketsexpected to drop slightly from 4-month highs when they
reopen later.
The dollar had eased off the pedal too, having made more than 1
percent against both the yen and the euro this week, something of a
turnaround after a weak start to the year.
Traders were waiting for IMF and G20 meetings in Washington later
for signs from financial leaders on the next stages of their efforts
to drag most of the developed world out of a debilitating cycle of
debt and very low inflation.
Speculation was also still circling about whether top oil producers
led by Saudi Arabia and Russia will be able to hammer a deal in
Doha, Qatar on Sunday to curb output which is currently churning out
around 2 million barrels of excess oil a day.

"This week we had some interesting movements especially in
euro/dollar and dollar/yen and a widespread rebound in market
sentiment," said Rabobank economist Philip Marey, adding that
Thursday's surprise move by Singapore's central bank to ease policy
had fueled hopes of another round of global stimulus.
Data from China overnight had drawn approval as it showed the
country's giant economy grew at 6.7 percent in the first quarter
year-on-year, bolstering hopes its slowdown may be bottoming out. <ECONCN>
The major currencies seen as most dependent on China were the main
gainers. The Australian <AUD=> and New Zealand dollars <NZD=> rose
0.3 and 0.9 percent respectively, also helped by sizable week's
gains in key metals like copper. <CMCU3>
In a sign of re-emerging risk appetite, the Baltic Dry index <.BADI>
which reflects global shipping and trade and seen as somewhat of a
bellwether of the global economy, was on course for a ninth straight
weekly rise, its best run since 2003.
"Chinese economic data is showing signs of stabilization, including
recent PMI numbers, as well as the latest figures on industrial
production and retail sales," said Suan Teck Kin, economist at the
United Overseas Bank in Singapore.
NEVER-ENDING STORY
Nerves about Greece's finances were also resurfacing amid signs that
its bailout program may be showing cracks again.
Greek bond yields were set to record their biggest weekly rise in
two months as investors start to fret about delays to Athens'
bailout package and over the extent to which the IMF will
participate in a new deal. [GVD/EUR]
[to top of second column] |

The head of IMF, Christine Lagarde had reiterated on Thursday the
euro zone needed to write off some of Athens' debt and rework plans
to get the country back on track.
"We will not walk away," Lagarde said during a question-and-answer
session. "Our form of participation may vary depending on the
commitments of Greece and the undertaking of the European partners,
but we will not walk away."
Japan's Nikkei, one of the biggest losers of 2016 so far, closed 6.5
percent higher for the week following the drop back in the yen.
MSCI's broadest index of Asia-Pacific shares outside Japan crept up
0.1 percent. That index has gained about 3.6 percent on the week
during which it hit a five-month high, helped by a slight thaw in
pessimism over the Chinese economy and an earlier surge in crude oil
prices.
It is part of a global rise. Both the MSCI All World index and the
S&P 500 have hit their highest points of the year this week
and Emerging Market stocks have racked up their best gain in a month
this week.
With oil traders waiting cautiously for the Doha oil producer
meeting, U.S. crude oil dropped back below $41 a barrel, while Brent
sagged to $42.85 a barrel.
The strong week for risk assets meant safe-haven gold was on course
for a weekly loss, while sterling, which has been buffeted by UK
Brexit vote uncertainty all year, was on course for a small weekly
rise at $1.4190.

It had been dampened on Thursday after Bank of England policymakers
voted unanimously to keep interest rates at a record low of 0.5
percent.
(Reporting by Marc Jones, editing by Pritha Sarkar)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |