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Singapore - Crude oil rose a second day before a meeting between OPEC and other major producers on output cuts, as gold slumped. Asian climbed toward their best week since September, while bonds and the Korean won declined.
US crude traded near $51 a barrel before talks Saturday in Vienna between the Organisation of Petroleum Exporting Countries and 14 other nations.
Japan’s Nikkei 225 Stock Average briefly erased losses for the year and shares in Sydney and Tokyo climbed, while those in South Korea and Hong Kong slipped. Bonds from Australia to New Zealand fell after the European Central Bank pledged to cut debt purchases, while at the same time extending quantitative easing until the end of 2017. The won trimmed its biggest weekly advance in two months.
OPEC’s shock deal aimed at stabilizing oil prices will return to focus this weekend, with the meeting potentially giving investors clues as to whether the agreement will be fulfilled.
While the ECB’s mixed message initially wrong-footed the market, it was eventually seen as a signal to buy equities as the extension of the current asset purchase program by three months was more than economists had expected. Attention now shifts to the Federal Reserve, with traders all but convinced the US will end the year with an interest-rate hike.
“The immediate focus for the market is the discussions between OPEC and non-OPEC members this weekend,” said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney.
“The sweet spot for prices is around $55 a barrel. Anything higher and the market will see more supply.”
China’s factory-gate inflation rose to the highest since late 2011, helping to sustain prices around the world. Consumer prices picked up on rising food costs.
Commodities
West Texas Intermediate crude futures climbed, extending Thursday’s 2.2% bounce and reducing oil’s retreat this week to 0.9%.
Russia will fulfill its pledge to cut output by as much as 300 000 barrels a day if OPEC follows through on its commitment to curb production, according to a government official familiar with the matter.
Representatives of countries including Mexico and Oman will meet with OPEC members in the Austrian capital. Gold for immediate delivery fell for a second session, declining 0.1% to $1 169.34 an ounce and heading for the worst run of weekly losses in more than a year
Stocks
About the same number of stocks rose as fell on the MSCI Asia Pacific Index, which climbed 0.1% as of 08:21.
Japan’s Topix index added 0.8%, while the Nikkei 225 rallied 1.2%. Australia’s S&P/ASX 200 Index rose by 0.3%, capping a weekly jump of 2.1%.
New Zealand’s S&P/NZX 50 Index fell 0.3%, with the Kospi index in Seoul down 0.3%. Hong Kong’s Hang Seng Index slumped 0.5%.
S&P 500 Index futures were unchanged after the underlying measure climbed 0.2% to a new peak on Thursday, swelling its post-election rally to more than 5%. The Dow Average added 65 points to a record 19 614.81, its seventh gain in eight days.
Currencies
The yen, which typically moves at odds with Japanese stocks, fell another 0.3% to ¥114.42/$, following a 0.2% pullback last session. It’s weakened 0.8% this week, set for its longest run of weekly losses in two years.
The euro was little changed at $1.0617 following a 1.3% slump, which erased an initial surge of as much as 1.1% on Thursday following the ECB’s statement. The won lost 0.6%, snapping a three-day rally. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, was little changed after gaining 0.5% on Thursday.
Bonds
New Zealand government bonds due in a decade led losses in Asia, with yields rising 10 basis points to 3.27%.
Yields on similar maturity notes in Australia climbed eight basis points to 2.82%. Ten-year Treasury yields advanced by another two basis points to 2.43%, after gaining seven basis points on Thursday following the ECB’s move.
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