Metals shine but world
stocks stuck near 5-1/2-week low
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[August 21, 2017]
By Marc Jones
LONDON (Reuters) - World stocks struggled
at a 5-1/2-week low on Monday, though metals dazzled with zinc at its
highest in a decade, copper hitting a nearly three-year high and iron
ore's gains in the last two sessions stretching to 5 percent.
Traders were digesting the latest departure from Donald Trump's White
House team, watching tensions around North Korea and waiting to see what
the world's top central bankers would signal at the annual Jackson Hole
gathering later in the week.
European stocks fell for a third session, though M&A activity helped
shipping giant Maersk jump and the rally in metals sent Rio Tinto, BHP
Billiton and Anglo American higher. [.EU]
Zinc hit its highest since October 2007 at $3,180.50 a tonne, bellwether
metal copper rallied to $6,593 a tonne, its highest since November 2014,
and nickel, used in stainless steel, gained over 2 percent to a 2017
It came amid hopes for Chinese infrastructure spending as stocks at
Chinese ports fall for a fourth week and a potential boost down the road
from electric cars, though some analysts cautioned moves may be
"I'm looking at the prospect for the global economy and looking at the
price of metals and there seems to be a significant disconnect between
the two," said CMC markets strategist Michael Hewson.
"But it's certainly helping the mining sector, which has been
beleaguered for quite some time."
In the currency market, the dollar remained hampered by Friday's latest
departure from U.S. President Trump's top team. This time it was chief
strategist Steve Bannon, a driving force behind his nationalist and
The dollar fetched 109.24 yen, not far from Friday's four-month low of
The euro was also in the doldrums, stuck at $1.1750 as it extended last
week's biggest weekly decline in more than two months. [FRX/]
Investors are looking to European Central Bank chief Mario Draghi's
comments later this week at a meeting of the world's central bankers in
Jackson Hole, Wyoming. Sources told Reuters last week he would not
deliver any fresh policy messages.
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A worker shelters from the rain under a Union Flag umbrella as he
passes the London Stock Exchange in London, Britain, October 1,
2008. REUTERS/Toby Melville/File Photo
Federal Reserve Chair Janet Yellen's keynote speech will also be a key
Comments last week from Fed officials suggested the stock market's
steady rise, still low long-term bond yields and a sagging dollar are
strengthening the Fed's intent to raise interest rates again this year
despite caution about weak inflation.
"People focus on inflation but in the Fed's minutes policymakers spend a
lot of time discussing whether bond yields are too low or asset prices
are too high. If Yellen questions market stability, markets will expect
a tighter policy," said Hiroko Iwaki, senior bond strategist at Mizuho
Oil markets steadied after big gains on Friday, which were triggered by
a drop in crude inventories. [O/R]
U.S. crude futures fetched $48.46 per barrel, down 0.1 percent, while
Brent futures were down 0.2 percent at $52.63 per barrel.
In fixed income, the 10-year U.S. Treasuries yield stood at 2.1852
percent, having slipped on Friday to 2.162 percent - its lowest since
German Bunds were steady at 0.4 percent. Greece's government bond yields
dipped early after Fitch became the second ratings agency to upgrade it
to "Single B" status, marking another milestone in the debt-laden
state's slow journey away from default territory. [GVD/EUR]
For a graphic on world FX rates in 2017, click http://tmsnrt.rs/2egbfVh
(Additional reporting by Hideyuki Sano in Tokyo; Editing by Dale Hudson)
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