Bloomberg Anywhere Remote Login Bloomberg Terminal Request a Demo

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Commodities Rise, Dollar Drops After China Keeps Rates on Hold

Traders work on the floor of the London Metal Exchange in London. Photographer: Chris Ratcliffe/Bloomberg
Traders work on the floor of the London Metal Exchange in London. Photographer: Chris Ratcliffe/Bloomberg

Dec. 13 (Bloomberg) -- Commodities rallied and the dollar weakened after China refrained from increasing interest rates. U.S. stocks erased gains, and Treasuries rose before tomorrow’s Federal Reserve statement on the economy as 10-year note yields near a six-month high attracted investors.

The Standard & Poor’s GSCI Index of commodities advanced 1.3 percent at 5 p.m. in New York as copper surged to a record high of $9,248 a metric ton in London. The euro rose 1.3 percent to $1.3391 as the dollar slumped against 15 of 16 major counterparts. The S&P 500 wiped out a 0.5 percent rally in the final 72 minutes of trading. Ten-year Treasuries rallied after yields increased to 3.39 percent.

While Chinese inflation accelerated to the fastest pace in more than two years, the central bank kept its benchmark interest rate unchanged. This helped boost optimism that the world’s fastest growing major economy will keep fueling the global expansion and demand for raw materials.

“There’s a sense of relief that there wasn’t further tightening by officials in China,” said Liam Dalton, president of Axiom Capital Management Inc. in New York, which oversees $1.4 billion.

The Dow Jones Industrial Average of 30 U.S. stocks rose 18.24 points, or 0.2 percent, to 11,428.56 as Caterpillar Inc. advanced 1.9 percent. The S&P 500 reached 1,246.73 before retreating. It approached 1,251.70, the measure’s last closing level before Lehman Brothers Holdings Inc.’s September 2008 bankruptcy sent the global economic into a tailspin. The S&P 500 plunged 46 percent between Sept. 12, 2008, and March 9, 2009, when it sank to 676.53.

France, China

The MSCI All-Country World Index of shares in 45 nations gained 0.7 percent today. Among developed nations, benchmark stock indexes for France, the U.K. and Japan posted the biggest gains with advances of at least 0.8 percent. In emerging markets, China’s main equity gauge jumped 2.9 percent for the biggest increase in two months.

Sugar, orange juice, coffee and silver surged more than 3.3 percent in U.S. trading as the falling dollar helped drive the rally in commodities.

Precious metals will probably give investors the best returns among commodities in the next year, and livestock the worst, Goldman Sachs Group Inc. said. Precious metals will advance 28 percent over 12 months and livestock 4 percent, London-based Jeffrey Currie, Allison Nathan and other Goldman analysts said in a report.

Orange-juice futures jumped to the highest since May 2007 after Florida, the world’s second-biggest citrus grower, declared a state of emergency amid severe cold and the prospects of crop damage.

Treasury 10-year notes advanced, driving yields down by four basis points, or 0.04 percentage point, to 3.28 percent. They advanced as a federal judge ruled against the U.S. health-care overhaul, easing concern that the government will struggle to contain record deficits.

To contact the reporter on this story: Nick Baker in New York at nbaker7@bloomberg.net; Inyoung Hwang in New York at ihwang7@bloomberg.net.

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.