Crude Rallies Above $45 as Yen’s Retreat Boosts Japanese Stocks – Bloomberg

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Crude oil rallied for a fourth day as wildfires curbed output in Canada, while a pullback in the yen helped lift Japanese shares from a four-week low. China’s stocks slumped with industrial metals after disappointing trade data from the nation.

Oil climbed as high as $45.94 a barrel in New York. Copper extended last week’s decline after imports into China, the world’s top base metals consumer, fell last month from a record. Shanghai shares were set for the biggest two-day loss since February, while Japan’s Topix index climbed for the first time in two weeks as the yen slipped to this month’s low. Gold retreated, after gaining Friday following the release of weaker-than-expected U.S. jobs figures.

The fires raging through Canada’s Alberta province have spread toward the oil-sands facilities north of Fort McMurray, knocking out an estimated 1 million barrels of production at a time when crude traders are fretting about a global supply glut. New York Fed President William Dudley said in a New York Times interview that it remained a “reasonable expectation” that the central bank would raise rates twice this year. China’s exports fell 1.8 percent in dollar terms in April, data released over the weekend showed, while imports dropped for the 18th month in a row.

“There is plenty of news for market participants to digest,” Chris Weston, chief markets strategist in Melbourne at IG Ltd., said in an e-mail to clients. “Asia-based traders will have their chance to react to the below-par payrolls data, so one should watch the dollar intently.”

Commodities

Crude oil climbed 2 percent to $45.57 a barrel in New York. Canada’s wildfires have led to cuts equivalent to about 40 percent of the region’s output, based on IHS Energy estimates. Also registering on oil traders’ radar is the replacement of Saudi Arabian Oil Minister Ali Al-Naimi with a close ally of the deputy crown prince. Al-Naimi will be succeeded by Saudi Arabian Oil Co. Chairman Khalid Al-Falih, an ally of Prince Mohammed bin Salman, who has backed the nation’s policy of prioritizing market share over prices and insisted any freeze on production must involve Iran.

Copper, nickel and zinc all dropped by more than 1 percent in London. Gold retreated 0.2 percent to $1,286.46 an ounce in the spot market, having gained 0.9 percent on Friday after the U.S. payrolls data. Platinum and palladium declined at least 0.5 percent.

Stocks

The MSCI Asia Pacific Index fell 0.2 percent as of 10:56 a.m. Tokyo time. The Shanghai Composite Index sank 1.7 percent, after sliding 2.8 percent on Friday. Japan’s Topix rallied 0.5 percent, after dropping 3.2 percent last week.

Benchmarks in South Korea and Indonesia fell as trading resumed for the first time since Wednesday. Philippine markets are shut for a presidential election.

Futures on the S&P 500 Index rose 0.1 percent, while contracts on the U.K.’s FTSE 100 Index gained 0.7 percent.

Currencies

Japan’s currency slipped 0.2 percent to 107.30 per dollar. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was little changed following its biggest weekly jump since November.

The greenback’s reaction to Friday’s U.S. jobs report was muted by comments from Fed Bank of New York President William Dudley. While the data was “a touch softer, maybe, than what people were expecting,” Dudley said in a New York Times interview that he wouldn’t put a lot of weight on it and that two rate hikes were still a reasonable expectation for 2016. The Fed reduced its outlook for rate increases this year to two from four in March.

The probability of the U.S. central bank hiking borrowing costs at its meeting next month fell to 8 percent after the jobs data, from 12 percent a week earlier.

The odds “seem too low for a ‘live’ meeting, but it highlights the huge difficulty facing the Fed,” Con Williams, a rural economist in Wellington at ANZ Bank New Zealand Ltd., said in an e-mail to clients. “Data releases apart, for a central bank that prides itself on nurturing market expectations, it has a mountain to climb to raise rates in June if it deems that appropriate.”

The South Korean won sank 0.9 percent from Wednesday’s close, while Indonesia’s rupiah slipped 0.3 percent.