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Asia Raw Material Producers Gain; Oil Nudges $50: Markets Wrap

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Asian raw-material producers advanced after a surge in commodity prices bolstered optimism the global economy can gather momentum. Oil extended last week’s strongest rally this year.

BHP Billiton Ltd., Rio Tinto Ltd. and Nippon Steel & Sumitomo Metal Corp. underpinned modest gains on the MSCI Asia-Pacific Index, which is on track to rise for a seventh month. Equity gauges in Japan, South Korea and Australia fluctuated. Oil added to gains from Friday, which came as inventories for crude and gasoline shrank. Copper’s rally has further to go, Citigroup Inc. said last week after the metal reached a two-year high while top producer Chile raised its price forecasts.

Investors are assessing economic numbers from the world’s top three economies. China’s official factory gauge, the manufacturing purchasing managers index, slipped to 51.4 in July, compared to the 51.5 median forecast in a Bloomberg survey of economists and 51.7 in June, amid government efforts to curb financial risks. The U.S. economy expanded 2.6 percent in the second quarter, indicating the world’s largest economy is growing steadily. Meanwhile, Japan’s industrial output for June rose 1.6 percent from the previous month, rebounding amid solid global demand.

Corporate earnings remain of interest, with HSBC Holdings Plc, Apple Inc., Tesla Inc., Berkshire Hathaway Inc. and Toyota Motor Corp. slated to unveil results throughout the week.

Geopolitics are back in focus, after Russia ordered the U.S. to slash staff at its diplomatic missions in the country in retaliation for new sanctions approved by Congress, while North Korea on Friday test-fired an intercontinentalballistic missile for the second time in weeks, threatening to sour relations between the U.S. and China.

Read our Markets Live blog here.

Here are some key events coming as the week gets going:

  • The Reserve Bank of Australia and the Reserve Bank of India both hold meetings this week. 
  • Thai current account data and factory output figures are due Monday.

Here are some of the key moves in markets:

Stocks

  • Japan’s Topix index swung between gains and losses. Earnings that beat expectations from the likes of Hitachi Ltd. and TDK Corp. were outweighed by a firmer yen against the dollar. Australia’s S&P/ASX 200 Index rose 0.3 percent. South Korea’s Kospi index lost 0.3 percent.
  • Hong Kong’s Hang Seng Index added 0.6 percent at the open, while the Shanghai Composite Index was little changed.
  • Futures on the S&P 500 Index fell 0.1 percent as of 10:27 a.m. in Tokyo. A bout of volatility last week sent the Nasdaq 100 Index lower and S&P 500 Index lower.

Currencies

  • The yen rose 0.2 percent to 110.41 per dollar, near Friday’s 1 1/2-month high, and the euro bought $1.1741.
  • The Australian dollar fell 0.3 percent to 79.65 U.S. cents after last week hitting 80 cents. The Aussie briefly dipped after the latest China data.
  • The Bloomberg Dollar Spot Index rose 0.1 percent after declining 0.4 percent last week for a third week of retreats.

Bonds

  • The yield on 10-year Treasuries fell one basis point to 2.28 percent.
  • 10-year Australian government notes were steady at 2.68 percent.

Commodities

  • West Texas Intermediate rose 0.2 percent to $49.79 after briefly testing above $50 a barrel for the first time since May.
  • Gold was little changed at $1,269.66 an ounce, set for a sixth month of gains in seven.

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