A slump in commodities deepened, with industrial metals and oil leading losses as the dollar cemented gains. European index futures fluctuated after the region’s equities posted their biggest weekly advance in four weeks, and Asian materials shares slid.
Crude extended its drop below $42 a barrel and copper fell to levels unseen since 2009 as comments from Federal Reserve officials about the prospect of a December rate increase bolstered the greenback. Nickel plunged 4.8% and gold declined, helping send the Bloomberg Commodity Index to a 16-year low. Futures on the Euro Stoxx 50 Index were little changed, while the euro touched the weakest level in seven months against the dollar. BHP Billiton Ltd. was the biggest drag on an index of Asian equities, Bloomberg reported.
The greenback’s surge this year has weighed on material prices at the same time as demand slows in China, the world’s biggest commodity consumer.
Copper fell through $4,500 a metric ton for the first time since 2009, while nickel dropped to the lowest level since 2003. Zinc lost 2.7% in London, giving up gains made on Friday after Chinese smelters announced plans to cut production.
West Texas Intermediate crude futures fell 2.8% to $40.74 a barrel. Oil prices may drop to as low as the mid-$20s a barrel unless OPEC takes action to stabilize the market, Venezuelan Oil Minister Eulogio Del Pino said. Saudi Arabia and Qatar are considering their country’s proposal for an equilibrium price at $88 a barrel, he said.
Gold for immediate delivery was down 0.6% to $1,071.50 an ounce.
Soybeans slid 0.9%. Argentinian farmers are hoarding as many as 22 million tons of the commodity, about one-third of last season’s record crop.
Currencies
The euro sank to a seven-month low of $1.06 after European Central Bank chief Mario Draghi said Friday that he and his fellow bank officials “will do what we must” to boost price growth.
A purchasing managers’ index of eurozone factories due Monday will probably come in unchanged at 52.3 for November, according to the median of economists’ estimates compiled by Bloomberg. A similar measure for Germany is forecast to drop to 52 from 52.1, still above the 50 threshold between expansion and contraction.
The kiwi slipped 0.8% to 65.10 US cents. Australia’s dollar also retreated, losing 0.9%. The nation’s government debt declined, pushing 10-year yields up three basis points to 2.93%. Rates on similar-maturity New Zealand debt climbed 2 basis points to 3.6%, the highest since July.
The Korean won dropped 0.4%. China’s yuan touched a three-month low as the central bank weakened the fixing amid a stronger greenback and concern over its economic slowdown persisted.
Stocks
The MSCI Asia Pacific excluding Japan Index retreated 0.2%, with materials shares losing 1.1%. BHP Billiton declined 2.1%. The Shanghai Composite Index lost 0.6% after China’s securities regulator gave the green light to initial public offerings following a five-month freeze. Guotai Junan International Holdings Ltd., the Hong Kong unit of one of China’s biggest brokerages, slumped as much as 17% after saying it can’t contact Yim Fung, its chairman and chief executive officer.
A rally in consumer shares drove a 0.4% advance for Australia’s S&P/ASX 100 Index, while New Zealand’s S&P/NZX 50 Index climbed 1.2% and the Kospi index in Seoul added 0.7%. Japan’s equity market is shut for a holiday. E-mini futures on the Standard & Poor’s 500 Index added 0.1% after the gauge capped its best week of 2015 on Friday.
