Monday February 22nd

22-02-2016

US futures higher; commodity rebound eyed

U.S. stock index futures indicated a higher open on Monday as a rebound in commodity prices helped boost sentiment across global equity markets. Dow futures rose 175 points after briefly gaining more than 200 points, while S&P and Nasdaq futures also pointed to a sharply higher open. Oil, which has been the top of investors' minds for the last few months, saw another rebound overnight with WTI futures rising above the $30 a barrel level. Mining and oil stocks that saw the most gains in Europe during the morning session thanks to gains in copper and other commodities. Miners like Anglo American, Glencore, Rio Tinto and BHP Billiton were among the best performers in the region and traders managed to shrug off new data that showed business activity in the euro zone hitting a 13-month low. Markets in Asia finished mostly higher, with major indexes in China, Japan and Australia leading gains, extending last week's advance. Chinese markets lead the pack, with the main Shanghai composite advancing 67.71 points, or 2.37 percent, to 2,927.73, while the smaller Shenzhen composite gained 37.66 points, or 2 percent, to 1,888.18. The Japanese benchmark index, the Nikkei 225, closed up 143.88 points, or 0.90 percent, at 16,111.05. The Japanese yen remained strong against the dollar, with the pair hovering around the 112-handle.The dollar-yen was at 112.86 by 2:49 p.m. HK/SIN time. That's down from levels over 120 at the beginning of the month, shortly after the Bank of Japan announced its shift to a negative interest rate policy. Back in the U.S., earnings are due from Fitbit and Motorola Solutions and the country will also get its own manufacturing PMI at 9:45 a.m. ET. There should also be some important headlines for the oil market when OPEC General Secretary Abdalla Salem El-Badri speaks at the CERAWeek energy conference in Houston later on Monday. IMF Managing Director Christine Lagarde said Monday that Middle East countries hit hard by the slump in the price of oil will have to raise taxes in order to recover and prosper. In a preview of a speech to be delivered at the Arab Fiscal Forum shares said that successful 21st century economies had to be able to both generate "robust government revenue" and "higher and more reliable revenue." Oil rose as much as 6 percent after the world's oil consumer body said on Monday it expected U.S. shale production to fall this year and next, potentially easing a glut that has driven prices to their lowest in more than a decade. A bounce in global stock markets and the after-effect of a fall in the U.S. oil rig count last week also supported prices. U.S. crude futures rose above $31 a barrel, gaining $1.75, or 5.9 percent, to $31.39 a barrel by 8:33 a.m. ET (1333 GMT). International benchmark Brent was up $1.77, or 5.3 percent, at $34.78 a barrel. Gold fell on Monday as the dollar strengthened and investor appetite for risk increased, but the metal remained above $1,200 an ounce after a rally that pushed prices to one-year highs this month. Concern over financial instability and the repricing of expectations for U.S. interest rate rises, has helped the metal outperform most assets so far this year with a 15 percent gain. Spot gold, which posted small losses last week on profit-taking after rallying to $1,260.60 on Feb. 11, was down 1.33 percent at $1,211.46 an ounce.