Asian shares surged to two-year highs, and copper and gold reached record levels on Monday as investors anticipated imminent interest rate cuts and enhanced measures by China to stabilize its struggling property sector.
Brent crude futures climbed to a one-week high of $84.25 per barrel following a helicopter crash that killed Iran's president and reports of health issues for the Saudi Arabian king, raising concerns about increased instability in the Middle East.
Gold rose over 1% to $2,449.89, while copper futures in Shanghai soared nearly 7% to a record 88,940 yuan per tonne and fetched $11,104.50 in London.
Analysts at ANZ attributed copper's rise to tight supply and signs of resilient global growth, noting record first-quarter imports of 566 tonnes of gold into China as a factor supporting prices.
MSCI's broadest index of Asia-Pacific shares outside Japan increased by 0.4%, Japan's Nikkei rose 0.7% to hit a five-week high, and global shares approached last week's record peaks.
S&P 500 futures edged up 0.1%, along with FTSE futures and European futures.
China announced "historic" measures on Friday to stabilize its property sector, including the central bank providing 1 trillion yuan ($138 billion) in additional funding and local governments purchasing some apartments. Benchmark rates remained unchanged as expected.
Investors, who recently welcomed a slowdown in U.S. inflation and indications from European policymakers of potential rate cuts as early as June, are now focusing on upcoming policy speeches, meeting minutes, a central bank decision in New Zealand, and Nvidia's financial results.
"The week ahead will pivot on the Fed speakers and (Fed) minutes in how they paint the picture of policy risks ahead, with a bias to ease rather than hike essential," said Bob Savage, BNY Mellon's head of markets strategy and insights.
Two-year U.S. Treasury yields ended last week four basis points (bps) lower at 4.825% and remained steady in Asia. Ten-year U.S. yields fell 8.4 bps last week to 4.42%.
BIG IN JAPAN
Speculation is increasing that Japanese interest rates may rise from zero, driving government bond yields to their highest levels in over a decade.
Ten-year yields increased by 2.5 bps to 0.975%, the highest since 2013, but the significant gap compared to U.S. yields kept the yen relatively unchanged.
"Something has to give, and if the Bank of Japan has to start to increase interest rates, that means long-end yields will also have to adjust higher, and I think we're starting to see that," said ANZ's head of Asia research Khoon Goh.
In currency markets, the dollar experienced its largest weekly drop against the euro in two-and-a-half months last week but was stable in Asian morning trade on Monday.
The euro edged up to $1.0880 on Monday, while the yen remained steady at 155.70 per dollar.
The Australian dollar rose 1.4% last week and held at $0.6697 on Monday, and the New Zealand dollar hovered at $0.6127. The Reserve Bank of New Zealand is expected to keep its main cash rate at 5.5% during its meeting on Wednesday.
Meeting minutes from the central banks of Australia and the Federal Reserve are also due this week, along with flash global PMIs.
Paraphrasing text from "Reuters" all rights reserved by the original author.
