The Sunday News
Edinburgh – Oil rose for a second day on signs producers are following through with agreed production cuts while most other financial markets took a breather from a rally that has propelled European stocks to their biggest weekly gain since February.
US crude advanced to more than $51 a barrel before Organisation of Petroleum Exporting (Opec) meets in Vienna with representatives from 14 other nations to discuss production cuts.
While the European Central Bank’s (ECB) decision to reduce debt purchases after March hurt bonds on Thursday, extending buying through 2017 and including securities with earlier due dates widened the yield curve and helped the main stock indexes in Italy and France extend their runs into bull-market territory, led by banks.
South Korea’s won slid after President Park Geun-hye was impeached.
Oil producers look to be turning word into deed with Saudi Arabia and Kuwait on the verge of following through on an agreement to cut production for the first time in eight years.
At the same time, the ECB’s pledge to expand its limits on asset purchases to include shorter-dated securities is expected to drive down borrowing costs for banks even though the central bank has announced it will curtail monthly additions after March, and is being interpreted as a buy signal in many quarters of the financial markets.
“The ECB decision supports financial assets as long as the expansionary monetary policy continues,” said Giovanni Staunovo, an analyst at UBS Group in Zurich. “Ongoing liquidity means everyone is happy.”
West Texas Intermediate crude advanced 0.4 percent to $51.02 a barrel as of 7:33 in New York Russia will seek discussions at its Saturday meeting with Opec about how the group will fully comply with production cuts, said a government official.
The Kremlin sees a higher risk that Opec might fall short of this commitment after the November output increase, the official said, asking not to be identified in line with government policy.
Nickel climbed 2.3 percent to $11 365 a metric tonne, paring a weekly decline as metals rebound in London after China’s factory-gate inflation rose to the highest since 2011. Copper rose 0.8 percent and zinc gained 1.4 percent. Gold fell 0.5percent to $1 164.72 an ounce.
The Stoxx Europe 600 Index climbed 0.7 percent, up 4.5percent this week Italy’s FTSE MIB Index fell 0.4 percent, cutting its weekly gain to 7.4 percent France’s CAC 40 Index advanced 0.6 percent, set for a 5.2 percent jump since December 2.
Drug makers, media and real estate companies were the best performers in the Stoxx 600, while banks trailed after their recent gains.
The won declined 0.6 percent versus the dollar. Less than two months since Park made her first apology for involving a friend in state affairs, 234 lawmakers – more than the required two-thirds of members in the National Assembly -voted for impeaching her while 56 opposed it.
The euro fell 0.4 percent to $1.0577, having slumped 1.3 percent on Thursday.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was up 0.3 percent after gaining 0.5percent on Thursday.
UK government bonds slid, with the 10-year gilt yield jumping five basis points to 1.44 percent after the Bank of England said UK consumers’ inflation expectations jumped to the highest in more than two years Treasuries with a similar due date extended their fifth weekly drop, with the yield rising two basis points to 2.43 percent.
The cost of insuring investment-grade corporate debt against default fell for a ninth day, on track for the longest run of declines since October 2007, according to data compiled by Bloomberg.
The Markit iTraxx Europe Index of credit-default swaps dropped about 0.5 basis point to 73 basis points. – Online
