European Index Futures Drop With Asia Stocks; Aussie, Oil Gain

European stock futures fell with Asian shares, while Australia’s dollar strengthened on an unexpected pickup in employment. Oil rose from a six-year low.

Japan’s Topix index retreated for a third day following the yen’s biggest jump in three months, while U.S. equity futures signaled a rebound after the Standard & Poor’s 500 Index dropped for a third day. New Zealand’s dollar advanced after the central bank lowered interest rates and signaled an end to the cuts, while the British pound traded near a two-week high before a Bank of England policy meeting. A rally in South Africa’s rand proved short-lived as Wednesday’s ouster of the nation’s finance minister fanned concern its credit rating will be cut to junk.

Oil’s slump since OPEC’s decision on Friday to effectively abandon its production target has unsettled global financial markets just as investors shift into countdown mode ahead of next week’s meeting of the Federal Reserve, its last for 2015. The dollar, which has been the main beneficiary of expectations U.S. interest rates will be raised for the first time since 2006, has been buffeted over the past few days, with a gauge of global currency volatility climbing as traders prepare for the decision. The MSCI Asia Pacific Index of shares was headed for its lowest close in two months.

Futures on the Euro Stoxx 50 Index sank 0.9 percent as of 7:09 a.m. in London, while contracts on the S&P 500 advanced 0.3 percent following a 0.8 percent decline in the gauge.

Source: Bloomberg

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Aussie to Real Defy Commodity Rout as Fed Defangs Rate Increase

Commodity currencies including the Australian dollar, South Africa’s rand and the Brazilian real are surging as traders focus on the potential for a gradual cycle of U.S. interest-rate increases and ignore a rout in raw material prices.

New Zealand’s dollar led gains on Thursday, when the greenback fell against its 16 major peers as minutes of the Federal Open Market Committee’s October meeting signaled a shallow path for any rate increases next year. The Aussie is poised for back-to-back weekly advances, with traders paying the smallest premium on options to protect against weakness in the currency in more than a year even as iron ore, Australia’s chief export, dropped to a four-month low.

The Aussie traded at 71.87 U.S. cents as of 9:18 a.m. in Tokyo from 71.94 on Thursday, poised for a 0.8 percent advance this week. New Zealand’s dollar fetched 65.59 U.S. cents after climbing 1.5 percent to 65.66 in the previous session. The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 peers, was little changed at 1,228.70 after declining 0.7 percent on Thursday, the biggest drop since Oct. 14.

Source: Bloomberg

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