Stocks, commodities climb as trade optimism builds

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MADRID (Feb 19): Stocks in Europe advanced after a rally in Asia drove the region’s shares to their highest level since October, amid optimism over China’s economy and trade talks. Commodities from oil to copper jumped.

The Stoxx Europe 600 rose, following a choppy morning as gains by telecommunications companies offset declines in carmakers, after President Donald Trump received a report that may be a preliminary step to raising tariffs on auto imports. U.S. equity-index futures were little changed, following a positive session in Asia, where China’s credit growth helped ease worries of a slowdown in the biggest regional economy and optimism for a trade detente with America boosted risk appetite. Talks resume this week in Washington.

The yen slipped with the dollar, while the euro strengthened despite dovish comments from a European Central Bank governing council member. A gauge of commodities climbed the most since December, with WTI oil futures rising above US$56 a barrel. U.S. exchanges are closed for Presidents’ Day.

Trade continues to dominate global markets as the economic superpowers race to reach a deal that would avert a tariff increase on Chinese goods by March 1, a deadline President Trump has said he may extend. Over the weekend, Trump said the talks have been “very productive.” President Xi Jinping also sounded upbeat, reportedly saying the latest round of meetings “achieved important progress in another step.”

Investors may also get further guidance on U.S. monetary policy this week. Minutes from the Federal Reserve’s most recent meeting will likely show how much conviction there was among policy makers to suspend their interest-rate hiking campaign.

Elsewhere, the pound strengthened after seven members of the U.K. Parliament said they’ll stand as independents after quitting the main opposition Labour Party over issues, including Brexit and antisemitism. Emerging-market assets advanced.

Here are some key events coming up:

The Federal Reserve will on Wednesday publish minutes from its recent meeting. Bank of Canada Governor Stephen Poloz speaks on Thursday; ECB President Mario Draghi speaks on Friday, the same day Reserve Bank of Australia Governor Philip Lowe gives parliamentary testimony. Australia’s central bank releases meeting minutes on Tuesday. Indonesia rate decision is also due Thursday.

These are the main moves in markets:

Stocks

The Stoxx Europe 600 Index gained 0.3% as of 3:20 p.m. London time, the highest in almost 19 weeks. The Shanghai Composite Index increased 2.7% on the biggest increase in more than 15 weeks. The MSCI Asia Pacific Index gained 1.2% on the largest rise in more than two weeks. The MSCI Emerging Market Index rose 0.6%.

Currencies

The Bloomberg Dollar Spot Index fell less than 0.05%. The euro rose 0.2%. The British pound jumped 0.3% to the strongest in more than a week. The MSCI Emerging Markets Currency Index advanced 0.1% to 1,637.80. The Indian rupee dipped 0.2%to 71.356 per dollar, the weakest in more than a week.

Bonds

Germany’s 10-year yield advanced one basis point to 0.11%. Britain’s 10-year yield gained one basis point to 1.165%. Australia’s 10-year yield climbed four basis points to 2.1425%.

Commodities

The Bloomberg Commodity Index gained 1.2% to 80.96. Iron ore rose 0.2% to US$86.19 per metric ton. West Texas Intermediate crude advanced 0.8% to US$56.04 a barrel, hitting the highest in three months with its fifth consecutive advance.