A look at the day ahead in European and global markets from Tom Westbrook
Copper and gold hit record highs in Asian trading on Monday, while silver rose more than $30. The sharp rise was all the more remarkable at a time when bonds and currencies were moving in ranges and with uncertainty rather than optimism about the outlook.
Meanwhile, global stocks were just below last week’s record peak.
The 18% year-on-year rise in gold prices has been variously attributed to buying in China, global political tensions and expectations that US rates will soon begin to fall, seen as a boon for a metal that generally does not produce yields.
Copper is rising thanks to China’s most determined efforts to bring its real estate market out of the doldrums.
On Friday, officials pledged a trillion yuan in funding for affordable housing and redevelopment and said local governments would act as buyers. Much is unclear, such as the impact on property prices, and property developers’ stock prices fluctuated on Monday.
But the macro signal was enough to direct the blow to short selling.
Last week, Reuters reported that Trafigura and IXM traders were looking for physical copper to cover large short positions in Chicago futures. Trading volumes surged in Shanghai and London and silver continued to rise, gaining 3% in Asia to top $30 an ounce.
Oil prices did not immediately respond Monday to reports of a helicopter crash that an Iranian official said killed Iran’s president and foreign minister.
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The week ahead is full of important data, but includes preliminary PMI data, earnings reports from the Federal Reserve and Nvidia (NASDAQ:), and a number of policy speeches led by Fed Vice Chairman Philip Jefferson on Monday.
Bonds rose and the dollar fell last week after U.S. inflation slowed as expected. But Treasuries pulled back and yields rose on Friday, while the dollar found some support as investors wait for more data to chart the economic outlook.
Minutes from the Federal Reserve this week and Australia’s central bank are likely to show that central banks are playing for time.
Key events that could impact markets on Monday:
Speeches: Jefferson from the Fed, Jansson and Tedin from the Riksbank, Broadbent from the Bank of England