China seeking `flexible' monetary policy, `forceful' spending Rupiah climbs with currencies of commodity producing nations Share on Facebook Share on Twitter Oil halted declines as emerging-market stocks gained for a second day and currencies climbed on the prospect of more economic stimulus from China. West Texas Intermediate advanced for the first time in five days before weekly U.S. crude inventory and production data, bolstering the currencies of commodity producing nations. Indonesia’s rupiah rallied with the New Zealand and Australian dollars. Spanish bonds and stocks halted a slide after inconclusive elections on Sunday. Coffee bounced after reaching the lowest in a month Monday amid prospects of more supplies from Brazil. U.S. equity futures were little changed. China’s government said late Monday that monetary policy must be more “flexible� and fiscal spending more “forceful� to combat slowing growth in the world’s second-largest economy. The rout in crude prices has pushed oil to the lowest levels since before the financial crisis, damping inflation and boosting the appeal of long-term government bonds. Oil is “slightly higher, partly on some profit-taking,� said Hans van Cleef, senior energy economist at ABN Amro Bank NV in Amsterdam. There “may be some upside potential ahead of the inventories, but if we see another inventory build then prices could drop some more� West Texas Intermediate futures for February rose 0.5 percent to $35.98 per barrel at 11:14 a.m. London time. Brent oil futures advanced 0.2 percent to $36.42 after the grade fell to as low as $36.04 on Monday, the least since July 2004. The MSCI Emerging Markets Index rose 0.4 percent. Commodities Oil inventories probably rose by 1 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. That would keep supplies about 130 million barrels above the five-year seasonal average. Nickel led declines in industrial metals, falling as much as 1.1 percent to $8,790 a ton on the London Metal Exchange. Inventories tracked by the London bourse expanded to the highest since Oct. 8, data showed Tuesday. Weak nickel supply and demand fundamentals are set to persist, Goldman Sachs Group Inc. said in a report Monday. Copper, lead and zinc also fell. Arabica coffee for March delivery increased as much as 0.6 percent to $1.1825 a pound in New York. It closed at $1.175 a pound Monday, the lowest since Nov. 18. A cold front will reach coast of Sao Paulo, bringing rain to Brazil’s southern parts of coffee belt, according to weather forecaster Somar Meteorologia. The Bloomberg Commodity Index was little changed after a two-day increase. Gold for immediate delivery was also little changed, according to Bloomberg generic pricing. Emerging Markets Middle Eastern stocks advanced the most in the developing world, with benchmark gauges in Dubai, Qatar and Saudi Arabia adding at least 1.1 percent. “We’ve had easing on multiple fronts in China and we are starting to see the green shoots of recovery there,� said Nader Naeimi, Sydney-based head of dynamic markets at AMP Capital Investors Ltd., which oversees about $114 billion. “We should see China’s economy turn the corner in 2016." A gauge of 20 emerging-market currencies rose for a third day, the longest streak since Nov. 20. Indonesia’s rupiah climbed the most among the 24 developing-nation currencies tracked by Bloomberg, after the government announced a policy package including support for oil refineries and aviation spare-part makers. Turkey’s lira slipped 0.2 percent against the dollar as investors awaited monetary-policy decisions from the central bank that may include a shift toward a single benchmark interest rate. Policy makers will raise the one-week repurchase rate, one of three benchmarks in the current system, according a majority of estimates in a Bloomberg survey, though six of the 22 economists polled expect the rate to be held. Stocks The Stoxx Europe 600 Index rose 0.3 percent after earlier swinging between gains and losses. A measure of oil-and-gas companies was among the rising industry groups on the index as Brent recovered. The volume of shares traded was 30 percent lower than the 30-day average. The equity benchmark is down 7.2 percent this month, headed for its worst December since 2002. Spain’s IBEX 35 Index added 0.5 percent, with Banco Santander SA contributing the most to gains. Shares tumbled the most since August yesterday after the inconclusive weekend election and the Socialists’ opposition to a new term for Prime Minister Mariano Rajoy set the scene for drawn-out negotiations over the shape of the next administration. U.S. index futures were little changed, with S&P 500 contracts less than 0.1 percent higher. Currencies New Zealand’s dollar jumped 0.8 percent to 68.15 U.S. cents while Australia’s rose 0.6 percent to 72.31 U.S. cents after the Chinese policy announcement. China is both nation’s biggest trading partner. “The Australian dollar is rising as a follow-through from rising prospects of Chinese policy easing,� said Elias Haddad, a currency strategist at Commonwealth Bank of Australia in Sydney. A gauge of the dollar is set to drop in December by the most in eight months as investors bet the Federal Reserve will wait until at least April to raise interest rates again after last week’s first increase in almost a decade. The U.S. Dollar Index, which tracks the currency against major peers, has dropped 1.8 percent this month, heading for the biggest slump since April. A report Tuesday will probably show U.S. gross domestic product expanded 1.9 percent last quarter, less than the 2.1 percent previously estimated, according to economists. Bonds U.S. 10-year Treasuries were little changed, halting a three day advance. The yield was at 2.20 percent after dropping 10 basis points in the three days following the Fed’s first rate increase in almost a decade. In Europe, German benchmark 10-year bunds fell, pushing the yield up three basis points to 0.58 percent. The yield on similar-maturity Spanish bonds was little changed at 1.78 percent. Italy’s 10-year yield was at 1.60 percent.

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