Despite the weak economic indicators from Europe, global markets show gains on Monday, driven by the rebound of commodity prices.
S&P 500 Index surges 1.23% to 1941 and the Nasdaq rises 1.3% to 4563 as of this writing. In Asia, Shanghai Composite jumped 2.35% to 2927 while Japan’s Nikkei 225 moved up by 0.9%. In Europe, the FTSE 100 Index rose 1.47% and DAX Index gained 1.98%.
Crude Oil – Electronic Mar 2016
In the commodity market, crude oil rallied more than 7% to around $31.8 per barrel, driven by the Friday’s lower rig count data that shows the decline in U.S. oil production. The surging oil price is also fueled by International Energy Agency’s cut on U.S. shale outlook. The IEA predicts in its report that U.S. Shale output in this year could drop by 600,000 barrels per day and another 200,000 barrels per day in 2017. Copper futures also rise today by about 1.9% following China’s announcement to reduce taxes on home purchases on Friday. Aiming at boosting home sales, the tax cut is effective from today.
Markets look very confident in spite of disappointing Eurozone Composite PMI data that indicates business activities in the manufacturing and services sector hit a 13-month low. The Eurozone Composite PMI for February dropped to 52.7 from 53.5, missing consensus estimate by 0.6. The weak data is considered another push for the ECB to deliver new stimulus in March.
Meanwhile, the British pound plunged over 2% against dollar on Monday, reaching lowest level since 2009, as the London Mayor Boris Johnson announced on Sunday that he would advocate for a British exit from the European Union.