Dollar rallied this week as odds of a Fed rate-hike jumped Gold on longest run of weekly losses this year; soybeans rise Share on Facebook Share on Twitter Financial markets stabilized after being buffeted this week by speculation the Federal Reserve is moving closer to raising interest rates. Global shares rebounded from a six-week low as crude and commodity prices headed for a weekly gain, while the yen weakened on reduced demand for haven assets. Futures on the S&P 500 Index indicated the gauge will trim a weekly decline, a day from the anniversary of its last record. Raw-materials producers and energy companies led the Stoxx Europe 600 Index higher as shares in the region rebounded from their biggest decline in two weeks. Crude traded near a seven-month high and copper rose from levels last seen in February. The yen dropped against all but one of its 16 major counterparts. Some $900 billion was wiped off the value of global shares over the last three days as traders stepped up bets on a June rate increase in the U.S., spurred by comments from Fed officials, minutes of the last policy meeting and quickening inflation. While the American economy shows signs of being able to weather higher borrowing costs, the outlook for global growth has been worsening and finance chiefs from the Group of Seven nations are meeting in Japan May 20-21 to discuss ways to tackle this. “After the losses of the last few days, bargain hunters are re-entering the market,� said Thorsten Engelmann, a Frankfurt-based trader at Equinet Bank. “The market seems to be able to deal with the Fed raising rates, and next week should be quieter now that the earnings season is over.� Even after the Fed’s minutes Wednesday sent a strong signal that an increase may come as soon as June, investors see plenty of obstacles, including the referendum on Britain’s EU membership and fading growth in China. The odds of a move next month are 28 percent, up from 4 percent a week ago, Fed Funds futures show. That’s even after New York Fed chief William Dudley touted the prospect of policy tightening at one of the central bank’s next two meetings, while Richmond Fed President Jeffrey Lacker said the case for hiking in June would likely be “very strong.� Stocks The MSCI All-Country World Index of shares rose 0.3 percent as of 8:30 a.m. in New York, climbing for the first time in four days. In Europe, the Stoxx 600 added 1 percent and futures on the S&P 500 added 0.3 percent. Applied Materials Inc. jumped 9 percent in early U.S. trading after the biggest maker of machinery used to manufacture semiconductors forecast third-quarter sales that may beat analysts’ estimates. The MSCI Emerging Markets Index rose 0.5 percent, paring its weekly decline to 1.4 percent. The gauge is headed for its fifth weekly drop in the longest run of losses since August. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose 0.7 percent. The Borsa Istanbul 100 Index slipped 0.7 percent as trading resumed following a holiday. Stocks have dropped more than 6 percent in May as President Recep Tayyip Erdogan tightened his grip on power. The ruling AK Party is set to elect Binali Yildirim, a close ally of Erdogan, as the new government chief on Sunday. Commodities Crude oil was at $48.03 a barrel in New York, headed for a weekly advance of about 3.9 percent. Prices were boosted this week as data showed U.S. output slid to the lowest since September 2014 and wildfires in Canada expanded. “We’ve got U.S. demand picking up and combining with bullish supply news filtering through the market,� said Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney. “Unless there is a clear new fundamental reason to buy oil, I think $50 is a hard psychological level to break through.� Copper rose 0.9 percent in London, while nickel rebounded from a six-week low. Gold was headed for a third weekly decline, its longest losing streak of the year. Soybeans in Chicago were set for a sixth weekly advance, the longest run of gains since 2013. The U.S. Department of Agriculture estimated last week that global inventories will fall 8.1 percent by the end of September next year. Currencies The krone climbed 0.5 percent, boosted by gains in energy prices, while the yen weakened 0.4 percent, set for a weekly drop of 1.6 percent. The Bloomberg Dollar Spot Index stayed near its strongest level since March. The pound declined for the first time in five days versus the dollar and slid from a three-month high against the euro. A lack of improvement in the economic outlook immediately after a vote to remain within the EU on June 23 “will reduce my confidence that inflation is likely to return to the target within an acceptable time horizon without additional monetary stimulus,� policy maker Gertjan Vlieghe said in a speech at the London Business School on Thursday evening. The pound fell 0.4 percent to $1.4559. It’s still set for its biggest weekly gain since April 29, up 1.4 percent. The MSCI Emerging Markets Currency Index rose 0.2 percent, leaving it down 1.1 percent this week. Bonds U.S. data due Friday are forecast to show sales of previously owned homes increase for a second month in April. U.S. Treasuries were headed for their first weekly loss in a month, with a Bloomberg index that tracks the securities having fallen 0.7 percent over the last four days. The yield on 10-year notes was little changed Friday at 1.86 percent, up 16 basis points from a week ago. The yield on similar-maturity German bond was at 0.18 percent. Japan’s 10-year yield fell three basis points to minus 0.105 percent. Overseas investors bought 3.6 trillion yen ($32.7 billion) of the nation’s government bonds in April, the most since August 2007, data showed Friday. The cost of insuring corporate debt against default declined, paring an increase for the week. The Markit iTraxx Europe Index of credit-default swaps on investment-grade companies dropped one basis point to 79 basis points. A gauge of swaps on junk-rated corporate issuers declined two basis points to 334 basis points. Both indexes are near six-week highs.

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