Coking coal rallied 10 percent and nickel led metals higher on Monday
London (Nov 7) Global stocks rallied with commodities and the Mexican peso on speculation Hillary Clinton’s chances of a US election win increased after the FBI stuck to its finding that her handling of e-mails wasn’t a crime. Demand for havens waned, with higher-rated bonds, the yen and gold retreating.
European shares rebounded from a four-month low and Asian equities rose with S&P 500 Index futures after the boost for Clinton, who is seen by investors as the more predictable presidential candidate. The peso jumped the most in four weeks, while a rally in the dollar versus the yen showed investors were close to fully pricing in a victory for the Democrat.
A gauge of commodities jumped by the most in a week, buoyed by industrial metals and oil, while gold dropped for the first time in eight days. Treasuries fell and perceived credit risk declined the most in six weeks. HSBC Holdings Plc. surged after a surprise jump in profit.
As Tuesday’s election approaches, financial markets have become more polarized on the candidates’ respective chances, with news favoring Republican candidate Donald Trump tending to weigh on stocks and boost demand for havens. US equities fell every day since FBI director James Comey’s announcement on Oct. 28 that the bureau was looking into more Clinton e-mails. The peso, an election bellwether, has been among assets tending to strengthen when Trump loses momentum as he has pledged to renegotiate the North American Free Trade Agreement and build a wall along the US border with Mexico.
“The market reacted to the message that they started the investigation and now they have to do the opposite,” said Piet Lammens, head of research at KBC Bank NV in Brussels. “However we are just one day before the election and it would be imprudent to take big positions and think everything is OK.”
S&P 500 Index futures surged 1.4 percent, after US equities last week extended their longest losing streak in more than three decades. Berkshire Hathaway Inc. climbed 1.3 percent in premarket New York trading after late Friday reporting a record $85 billion in cash on its books as of Sept. 30, even as third-quarter earnings fell short of estimates.
The peso climbed 2 percent. The currency posted declines in the past two weeks as Clinton’s lead over Trump narrowed in opinion polls amid the FBI’s renewed probe.
The Bloomberg Dollar Spot Index was set for its biggest gain in more than two weeks, rising 0.4 percent. The US currency’s rally against the euro and the yen leaves it close to levels where it’s likely to trade 24 hours after a Clinton victory, based on the estimates of the top 10 currency forecasters as ranked by Bloomberg.
The greenback is being boosted by speculation that a Clinton presidency is now more likely, and that will pave the way for the Federal Reserve to raise interest rates in December.
Gold sank the most in a month, joining a slide in other haven assets after the FBI statement was seen boosting Clinton in the final stretch of the election campaign.
Source: Business Headlines
