Copper Slips With Australian Stocks as Nikkei Futures, Oil Drop

Bloomberg News

Copper futures fell with Australia's dollar as weaker-than-estimated Chinese data stoked concern over the outlook for the world's second-largest economy. U.S. index futures and Brent crude oil retreated while palladium dropped for the first time in eight days.

Copper futures on New York's Comex sank 0.8 percent by 7:56 a.m. in Tokyo with the Aussie losing as much as 0.4 percent to 90.32 U.S. cents. China is the world's biggest consumer of copper and is Australia's No. 1 trading partner. Standard & Poor's 500 index futures fell 0.2 percent after the gauge rose 1 percent last week. New Zealand’s (NZSE50FG) NZX 50 Index declined 0.4 percent. Brent snapped a two-day gain, falling 0.3 percent. Palladium fell 0.1 percent after last week's 5.3 percent jump.

Chinese exports slid the most since 2009 last month and inflation slowed to a 13-month low amid declining producer prices, data released March 8 showed. Searchers continue to look for traces of a Malaysian Airline System Bhd. plane amid concern over passengers traveling on stolen passports, while in Crimea, Russian troops detained Ukrainian border guards. Japan posts growth and balance of payments data today after a report March 7 showed a bigger-than-forecast jump in U.S. payrolls.

'China's weaker-than-expected export number will heighten market sensitivity,' Ric Spooner, chief markets analyst at CMC Markets in Sydney, wrote in an e-mail to clients today. 'The situation in Ukraine is also a background factor that's likely to see some trader caution at the moment. While risk premiums were unwound last week when the immediate threat of Russian military action became less likely, markets are still respectful of the fact that the situation remains very unstable.'

Warning Shots

Russian President Vladimir Putin has defended Crimea's local government, which is holding a referendum March 16 to leave Ukraine and join Russia. The border guards were held a day after gunmen fired warning shots international observers and barred them from the disputed region. Ukraine's Prime Minister Arseniy Yatsenyuk said at the weekend that he will travel to Washington March 12.

Copper futures for delivery in May declined to $3.0615 a pound, after sliding 4.2 percent March 7, the most since December 2011. Stockpiles tracked by the Shanghai Futures Exchange gained 4.6 percent to 207,320 tons last week, the highest level in 10 months.

The Aussie was down 0.2 percent at 90.54 U.S. cents by 9:54 a.m. in Sydney following last week's 1.6 percent gain, the best performance among major Asia Pacific currencies against the greenback.

First Default

Overseas shipments from China dropped 18.1 percent in February from a year earlier, after analysts polled by Bloomberg predicted a 7.5 percent increase. Producer prices slid 2 percent, the most since July, while the inflation rate was 2 percent for February, reports at the weekend showed. The National People's Congress, an annual meeting of China's lawmakers, continues this week. People's Bank of China Governor Zhou Xiaochuan will speak at the meeting tomorrow.

Shanghai Chaori Solar Energy Science & Technology Co., a solar-cell maker, said March 7 it won't be able to make an interest payment due that day in full, providing the first default in China's onshore bond market. Chaori's experience may be a sign the government is backing off from its practice of bailing out companies with bad debt.

The yen, viewed as a safe haven, was the biggest decliner among 16 major peers tracked by Bloomberg last week, losing 1.4 percent as concern abated that Russia's occupation of Ukraine's Crimea region will escalate into a broader conflict. The currency was little changed today at 103.17 per dollar.

Japanese Data

Japanese gross domestic product probably rose 0.9 percent in the fourth quarter on an annualized basis, down from 1 percent growth in the previous three-month period, according to the median estimate of 20 economists surveyed before data due today. The Bank of Japan reports on monetary policy tomorrow, with Governor Haruhiko Kuroda to address reporters.

Qatar's benchmark QE Index rose 0.3 percent yesterday, rising a second trading day as investors bet the country will resolve a diplomatic row with its Persian Gulf neighbors over its support for the Muslim Brotherhood. Dubai's DFM General Index retreated 0.3 percent and shares in Abu Dhabi fell 0.4 percent.

Nikkei 225 Stock Average futures dropped 0.1 percent to 15,270 by 3 a.m. in Osaka March 8, while rising 0.1 percent to 15,315 on the Chicago Mercantile Exchange. Futures on Sydney's ASX/200 Index retreated 0.3 percent while contracts on the Kospi Index in Seoul declined 0.3 percent at the end of last week. Futures on Hong Kong's Hang Seng and Hang Seng China Enterprises gauges fell at least 0.4 percent in recent trading.

U.S. Moves

The S&P 500 rose 0.1 percent March 7 to close at a record 1,878.04 as the Dow Jones Industrial Average added 0.2 percent to 16,452.72. Yields on 10-year U.S. Treasuries climbed five basis points, or 0.05 percentage point, to 2.79 percent in New York, the highest close since Jan. 22. More than $4 trillion has been added to equity values around the world since the Feb. 4 low, reaching a record $63 trillion.

Economists projected U.S. payrolls would rise 149,000 last month, with the bigger-than-expected increase indicating the economy is starting to bounce back from frigid winter weather.

'The fact employment rebounded in February despite the harsh weather pretty much guarantees the Fed will continue with its steady process of tapering by $10 billion at its next meeting,' Kymberly Martin, a markets strategist in Wellington at Bank of New Zealand Ltd., wrote in an e-mail to clients today, referring to the Federal Reserve and its bond-buying program.

Brent, Palladium

Safeway Inc. slid 2.2 percent March 7 as investors weighed potential antitrust hurdles to a buyout offer for the company. Nike Inc. rose 1.6 percent on a report the apparel and footwear maker signed quarterback Johnny Manziel to a marketing deal.

Brent slipped to $108.66 a barrel today while West Texas Intermediate crude was little changed at $102.44 per barrel after jumping 1 percent March 7 after the U.S. payrolls data.

The unemployment rate rose to 6.7 percent from 6.6 percent, with economists predicting it would hold at 6.6 percent. The Labor Department's survey of households showed an increase in people entering the workforce.

Palladium dropped to $781.25 an ounce in early trading today, while gold was little changed in the spot market at $1,339.80 an ounce following last week's 1 percent climb, the precious metal's fifth straight weekly advance and longest rally since January.

To contact the reporter on this story: Emma O'Brien in Wellington at eobrien6@bloomberg.net

To contact the editors responsible for this story: Emma O'Brien at eobrien6@bloomberg.net Matthew Brockett

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