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Hong Kong - Global equities rallied for a second day and S&P 500 futures advanced as crude oil climbed to levels last seen in October.
Australia’s dollar jumped and the nation’s bonds fell after the central bank released minutes of its last policy meeting.
Raw-materials producers led gains on the MSCI All Country World Index, which extended Monday’s rebound from a one-month low. The Bloomberg Commodity Index rose toward a six-month high as crude traded above $48 a barrel, while copper and gold advanced for a third day.
The Aussie strengthened against all 31 major counterparts after the Reserve Bank of Australia’s minutes curbed speculation interest rates will be cut again at coming reviews. The British pound climbed by the most in four weeks as a poll indicated support is growing in the UK for the country to remain in the European Union.
A pickup in commodity prices is giving a boost to global equities after weaker economic data and disappointing company earnings wiped out almost $2trn of value in the first two weeks of May.
Investors trying to get a better handle on the outlook for US monetary policy are looking ahead to the release of minutes from the Federal Reserve’s April meeting due on Wednesday, as other central banks struggle to fuel inflation. Prospects for a US interest-rate increase helped strengthen the dollar over the last two weeks.
“Markets seem to be in a relatively sweet spot with a steadily stronger US dollar and resilient commodities prices,” Angus Nicholson, a markets analyst at IG in Melbourne, said by email. “Many investors have been predicting a pullback in markets, but despite all the negativity, markets have continued to grind higher.”
US data on Tuesday are forecast to show inflation quickened last month, while housing starts and industrial output are seen following declines in March. The UK is also due to release details of changes in its consumer prices and Home Depot is among American companies reporting earnings.
Stocks
The Stoxx Europe 600 Index rallied 0.9% as of 09:13. Vodafone jumped by the most in two months after the wireless carrier reported quarterly sales growth on its network that beat estimates.
Iliad SA, the low-cost mobile-phone company founded by French billionaire Xavier Niel, gained for the first time in a week after reporting a 6.6% increase in revenue.
S&P 500 futures rose 0.2% following a 1% climb in the underlying measure on Monday, when Apple - the world’s most valuable company - climbed 3.7% as Warren Buffett’s Berkshire Hathaway disclosed it bought a stake in the company.
The MSCI Asia Pacific Index added 0.8%, with a gauge of energy shares surging 2.3%. Japan’s Topix index gained 1.1% before figures on Wednesday that are forecast to show the economy expanded at a 0.3% annualised rate in the first quarter, sidestepping a recession.
“Investors still want more positive factors to buy aggressively," said Toshihiko Matsuno, chief strategist at SMBC Friend Securities in Tokyo. "They want to wait and see the gross domestic product announcement and the Federal Reserve minutes released tomorrow.”
Mitsubishi UFJ Financial Group, Japan’s largest bank, gained for the first time in three days as plans for a share buyback outweighed a profit forecast that missed analyst estimates. NTT Docomo and KDDI slid more than 2.5% after Bloomberg reported that the government plans to step up pressure on the country’s biggest mobile-phone carriers to offer cheaper plans.
The Shanghai Composite Index fell 0.3%, after rebounding from a two-month low on Monday. BlackRock ’s Laurence D. Fink, who oversees the world’s largest money manager with $4.7trn of client assets, said “we all have to be worried” about China’s mounting debt amid slowing growth, even as he remains bullish on the nation in the long term.
Currencies
The Aussie strengthened as much as 1.1% versus the greenback, its biggest intra-day gain in a month. While RBA board members considered leaving the benchmark interest rate unchanged so they could await more information, policy makers on May 3 opted to cut the benchmark by a quarter point to 1.75%, according to minutes of the meeting released on Wednesday.
“There’s now a sharp fall in chances of a near-term follow-up cut,” said Sean Callow, a senior foreign-exchange strategist at Westpac Banking in Sydney. “It’s clearly a positive environment for the Australian dollar.”
The British pound rose 0.8% after a poll of UK voters showed 55% were in favour of remaining in the European Union before a referendum on the issue next month, while 40% wanted to leave. The proportion in the remain camp increased from 52% in a similar survey in April.
The Russian rouble, the rand and South Korea’s won appreciated 0.5% or more, leading gains among emerging-market currencies.
Commodities
West Texas Intermediate crude climbed 1.2% to $48.29 a barrel before US data on Wednesday that’s forecast to show American stockpiles dropped for a second week, easing a glut. Oil gained 3.3 percent in the last session after Goldman Sachs said the market moved into a deficit earlier than analysts expected amid an increase in demand and supply disruptions in Nigeria.
In London, copper for three-month delivery climbed for a third day and aluminum extended Monday’s rebound from a one-month low.
Prices of gold, silver, platinum and palladium advanced. Billionaire George Soros in the first quarter bought a $264m stake in Barrick Gold, the world’s biggest bullion producer, an official filing shows. Money managers expanded their bullish bets on silver using US futures and options to an all-time high in the week ended May 10, according to Commodity Futures Trading Commission data.
Bonds
Australian bonds dropped, pushing the 10-year yield up six basis points from a record low to 2.30%. Rates on similar-maturity US Treasuries increased by one basis point to 1.76%, after climbing five basis points in the last session.
The US Treasury Department released a breakdown of Saudi Arabia’s holdings of US debt on Monday, after keeping the figures secret for more than four decades. The stockpile stood at $116.8bn as of March, down almost 6% from a record in January, according to the data.
Thai sovereign bonds due in a decade dropped, pushing their yield to a two-month high of 1.89%. Foreign investors cut their holdings of the nation’s debt for a third straight day on Monday.
