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Sydney - Stocks in Europe started the month on a positive note, with basic-material shares underpinning a rally as nickel led a surge in industrial-metal prices. Oil headed for an eight-month high after US industry data showed inventories declined last week.
The Stoxx Europe 600 Index jumped to a more than two-year high, with most industry sectors rising. Earlier, equities advanced from Tokyo to Sydney as technology stocks gained on a raised profit outlook from Sony.
US equity-index futures climbed on optimism tax reforms are still on track, while the dollar and Treasuries were little changed as investors awaited the Federal Reserve’s policy decision and President Trump’s announcement of the next central-bank chair.
All LME metals gained, led by nickel, which has been on a tear since Tuesday after Trafigura Group joined Glencore in revealing bullish forecasts because of the popularity of electric cars. Nickel sulphate is a key ingredient in lithium-ion batteries.
The Bloomberg Commodity Index increased 0.6% to the highest since March, also buoyed by optimism that demand from China won’t falter after a gauge of Chinese manufacturing that gives greater weight to smaller and private firms suggested growth momentum remains robust.
In the US, the Federal Reserve is expected to keep rates on hold Wednesday while signalling an all-clear for a December hike. An announcement on who will helm the US central bank is due by the end of the week, with current board member Jerome Powell said to have the edge over the likely more hawkish John Taylor.
One potential threat to the markets’ risk-on mood could come from the unfolding investigation into whether the Trump campaign colluded with Russian interests after the first indictments from Special Counsel Robert Mueller.
Former Trump adviser George Papadopoulos claimed campaign officials approved a pre-election meeting with Russian representatives. Politico reported that House Republicans are postponing the release of the tax bill to Thursday.
Elsewhere, bitcoin soared to a record after CME Group, the world’s biggest exchange operator, said it plans to launch futures trading on the cryptocurrency by year-end.
Here are some other key upcoming events this week:
• The US October payroll report comes out on Friday.
• Trump starts an 11-day trip to Asia, his first as president, on Friday.
• Trade and security issues - particularly North Korea - will probably be in focus.
• A probable Bank of England rate hike on Thursday will be the first in a decade.
• The slew of earnings releases will culminate with Apple results.
And these are the main moves in markets:
Asia
• Japan’s Topix climbed 1.2% and the Nikkei 225 Stock Average jumped 1.9% at the session’s close in Tokyo.
• Sony soared 11%, the biggest advance in more than nine years.
• Australia’s S&P/ASX 200 Index added 0.5%.
• South Korea’s Kospi index was up 1.3%.
• While export data missed estimates, the latest data showed they continue to motor ahead.
• Hong Kong’s Hang Seng Index rose 0.9% and the Shanghai Composite Index advanced.
• The MSCI Asia Pacific Index jumped 0.9%. It had its second-best advance this year in October, up 4.3%.
• The Japanese yen declined 0.3% to 113.93 per dollar.
Stocks
• The Stoxx Europe 600 Index increased 0.6% as of 09:16, hitting the highest in more than two years with its fifth consecutive advance.
• The UK’s FTSE 100 Index climbed 0.5% to the highest in almost two weeks.
• Germany’s DAX Index increased 1% to the highest on record.
• Futures on the S&P 500 Index rose 0.3%.
Currencies
• The Bloomberg Dollar Spot Index decreased less than 0.05%.
• The euro was unchanged at $1.1646.
• The British pound increased 0.2% to $1.3303, the strongest in more than a month.
Bonds
• The yield on 10-year Treasuries increased one basis point to 2.39%.
• Germany’s 10-year yield rose less than one basis point to 0.37%, the first advance in a week.
• Britain’s 10-year yield climbed less than one basis point to 1.335%, the first advance in a week.
Commodities
• West Texas Intermediate crude increased 0.9% to $54.87 a barrel, reaching the highest in eight months on its fifth consecutive advance.
• Gold rose 0.3% to $1 275.21 an ounce.
• Copper gained 1.7% to $3.15 a pound, the biggest advance in more than two weeks.
• Nickel jumped to the strongest since June 2015, advancing as much as 3.9% and was up 3.1% at 12 670 a ton.
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