Tuesday, 17 July 2012

Copper, Asian Currencies Climb On U.S., China Stimulus Outlook

By Glenys Sim and Susan Li - Jul 18, 2012 9:01 AM GMT+0400

Copper climbed for the first time in three days and Asian currencies rose as investors anticipated more stimulus from the U.S. and China. Oil declined and shares of utilities and Chinese real-estate companies dropped.
Copper in London advanced 0.5 percent at 1:39 p.m. in Tokyo. South Korea’s won and Malaysia’s ringgit gained for a fourth day, while the dollar traded near a one-week low against the euro. Oil dropped from a seven-week high. Standard & Poor’s 500 Index futures fell 0.2 percent and the MSCI Asia Pacific (MXAP) Index was little changed.
Federal Reserve Chairman Ben S. Bernanke, set to appear before a House committee today, told the Senate Banking Committee yesterday that policy makers are studying options for further easing that could include further purchases of assets. China’s State Council may announce measures to support growth after meeting today, according to analysts and state-run media. Premier Wen Jiabao said yesterday the labor situation will become more “severe,” underscoring concern that the weakest economic growth since 2009 will lead to increasing job losses.
“When the economy slows down and you don’t get enough jobs they expect the Fed to come up with miracles,” Kumar Palghat, founder of Kapstream Capital Pty, which manages A$4.5 billion ($4.5 billion) in Sydney, said in a Bloomberg Television interview. “Europe is really dragging the U.S. down as well, it’s not helping. The Fed can try whatever it wants but job creation is going to be tough.”

China Home Prices

New home prices in China rose last month in the most number of cities tracked by the government this year. The statistics bureau, which released the data today, said the country should maintain property curbs.
The result poses a dilemma for Wen, who is trying to spur the growth with interest-rate cuts. Shares of developers declined as the data makes it more difficult to loosen property policies, according to Nomura Holdings Inc.
A gauge tracking property shares in Shanghai slid 3.4 percent, set for the biggest drop since March and falling the most among five industry groups on the Shanghai Composite Index. Poly Real Estate Group Co. declined 4.7 percent and Gemdale Corp. (600383) decreased 7.4 percent.
About five stocks fell for every four that rose on the MSCI Asia Pacific Index. Hokuriku Electric Power Co. (9505) slumped 21 percent and Kansai Electric Power Co. slid 6.2 percent after Nikkei news reported that regulators will ask them to conduct geological studies of fault lines at their nuclear plants.

Asian Currencies

The dollar fetched $1.2280 per euro after touching $1.2317 yesterday, the weakest level since July 10. The Federal Reserve issues its Beige Book assessment of economic conditions today, while a report later may show U.S. housing starts climbed to a 745,000 annual pace last month from 708,000 in May, according to a Bloomberg survey.
South Korea’s won rallied the most in two weeks even as Kim Jong Un consolidated his hold on North Korea by taking the nation’s top military post. The ringgit strengthened 0.1 percent and the Philippine peso rose 0.2 percent.
Oil fell 0.6 percent to $88.71 a barrel on concern fuel demand may falter after China signaled more economic weakness. Futures advanced for a fifth day yesterday, to a seven-week high as data showed U.S. oil stockpiles dropped for a third week.
Three-month copper on the London Metal Exchange rose as much as 1.2 percent to $7,684.75 a metric ton, before trading at $7,628 a ton. Gold declined for a third day, falling 0.2 percent to $1,580.65 an ounce.
Corn climbed 0.2 percent to $7.725 a bushel as the worst drought in decades wilts crops in the U.S., the biggest grower and exporter, boosting concern that production may decline. The price reached $7.89 yesterday, the highest level for a most- active contract since June 9, 2011, and near the record $7.9925 set in 2008.
To contact the reporters on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
Susan Li in Hong Kong at sli31@bloomberg.net
To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net