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GLOBAL MARKETS-Stocks cheer prospects for low rates, copper shines

Published 10/05/2021, 09:18 pm
Updated 10/05/2021, 11:00 pm
© Reuters.
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* World shares climb to fresh record high, up 0.2%

* Copper, iron ore prices at new all-time peak

* Cyber attack on U.S. pipeline lifts oil prices

* Shock U.S. jobs data ease concerns over Fed rate hikes

* Dollar nurses losses, sterling rises above $1.40

By Danilo Masoni

MILAN, May 10 (Reuters) - World stocks and copper prices hit new peaks on Monday on bets that interest rates will remain low and the economy will continue its recovery, while oil prices jumped after a cyber attack on a U.S. pipeline operator.

MSCI's gauge of stocks across the globe .MIWD00000PUS hit a fresh record high and was up 0.2% by 1219 GMT, driven by gains across Asian markets and a steady session in Europe.

Copper raced to a new all-time high as investors worried about missing out on further gains driven by expectations for improved demand amid tightening supply. MET/L

Oil prices were buoyed after a cyber attack shut down a U.S. pipeline operator that supplies nearly half of the U.S. East coast's fuel. O/R

Europe's STOXX 600 .STOXX index also reached a new historic peak and was up 0.1% as big London-listed miners rallied on strong commodity prices, while MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.6%.

S&P 500 EScv1 futures were up 0.1% while Nasdaq NQc1 futures fell 0.3%.

U.S. nonfarm payrolls data on Friday showed jobs growth slowed much more than expected in April, a shock release that gave equities a lift but applied downward pressure on the dollar and U.S. Treasury yields.

"A statistical fluke and/or a temporary pause in labor market demand is the likeliest culprit for this report. However, the Federal Reserve cannot afford to adjust policy without concrete proof of a stronger labor market recovery," said Natixis economist Troy Ludtka.

On Friday the Dow Jones Industrial Average .DJI and the S&P 500 .SPX rose to record closing highs as the disappointing data on the U.S. jobs market eased concerns about a spike in consumer prices. recent weeks, some investors had been placing bets that a robust U.S. economic recovery from the coronavirus pandemic would force the Fed to tighten policy earlier than the central bank has outlined.

However, the weak nonfarm payrolls report caused a rapid reversal in some of these trades, which rippled through stocks, bonds and major currencies.

U.S. President Joe Biden said after the report that the figures showed the economy was not at risk of overheating and underscored how vital his administration's economic actions are. the end, it is the best of all possible worlds for equities: robust economy, strong earnings, but no monetary policy tightening and more fiscal spending coming," said Giuseppe Sersale, fund manager at Anthilia in Milan.

The focus now shifts to U.S. consumer price data due on Wednesday, which will help investors determine whether they need to scale back their inflation expectations even further.

The dollar index =USD against a basket of six major currencies was little changed at 90.114, just above 2-1/2 month lows hit earlier in the session.

The pound broke above the key $1.40 level for the first time in more than two months, even as pro-independence parties in Scottish elections won a majority. GBP/

The pound was up 1% against the dollar at $1.4127 GBP=D3 .

In the cryptocurrency market, ether ETH=BTSP rose to a fresh record above $4,000 and was last up 4.4%. Bigger rival bitcoin BTC=BTSP fell 0.6% to $57,939.

The yield on benchmark 10-year Treasury notes US10YT=RR was little changed at around 1.579% after having plunged to a two-month low of 1.469% on Friday.

Three-month copper on the London Metal Exchange CMCU3 climbed to an all-time high of $10,747.50 a tonne after first breaking through a decade-old record on Friday.

Copper also hit a record high on the Shanghai Futures Exchange as the most-traded June copper contract SCFcv1 closed up 4.8% to 77,720 yuan ($12,094.62) a tonne.

Iron ore SZZFc1 rose as much as 9%, also scaling a record peak, reflecting optimism about the economic outlook.

"Commodities are being driven by stronger demand as the global economy recovers from the pandemic and supplies are getting tighter," said AJ Bell investment director Russ Mould in London.

Analysts said Friday's disappointing April non-farm payrolls further fuelled the rally in metal prices as the dollar got hit.

Brent crude LCOc1 rose 1.1% to $69.03 per barrel as the disruption to U.S. supplies rattled energy markets, while U.S. crude CLc1 added 1% to $65.52 a barrel.

The White House was working closely with top U.S. fuel pipeline operator Colonial Pipeline on Sunday to help it recover from the ransomware attack that forced the company to shut its main fuel lines. World FX rates YTD

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