Crude Climbs on Stockpiles as Copper Gains; Kiwi Weakens

Crude oil snapped a four-day decline on speculation U.S. stockpiles fell last week, while copper rebounded. Asian stocks slipped a second day as the New Zealand dollar and South Korean won retreated.

West Texas Intermediate crude climbed 0.2 percent to $103.32 a barrel by 10:01 a.m. in Tokyo, after sliding almost 5 percent over the past four sessions. Copper rose for the first time in four days. The MSCI Asia Pacific Index fell 0.2 percent as Japanese stocks dropped and Australian shares rallied. Standard & Poor’s 500 Index futures were little changed after the gauge lost 0.3 percent in New York. New Zealand’s dollar and the won weakened at least 0.3 percent versus the greenback.

A private survey showed China’s economy slowed this quarter, as investor Jim Chanos told a conference in New York he isn’t convinced by the nation’s improving fundamentals. The Philippines publishes trade data, Taiwan posts export orders and Vietnam issues gross domestic product figures today. U.S. crude inventories may have declined to an 18-month low last week, according to a Bloomberg survey of analysts before today’s Energy Information Administration report.

“There’s good support for prices at these levels, and the data is the trigger for them to go higher,” Jonathan Barratt, chief executive officer of Barratt’s Bulletin in Sydney, said by phone today, referring to oil prices. “A lot of the risk premium we saw earlier in the month has come off as tensions in the Middle East abate, and now the market’s all about supply and demand. And with inventories expected to show a fall, we could see prices rise.”

Brent crude futures and gasoline contracts both rose 0.1 percent, while natural gas futures added 0.3 percent.

API Report

U.S. oil supplies fell 54,000 barrels last week, according to the industry-funded American Petroleum Institute. WTI dropped to the lowest close in eight weeks yesterday on speculation President Obama may have contact with Iran’s Hassan Rohani at the United Nations General Assembly in New York, stoking speculation of a thawing in relations. WTI is up 7 percent in the third quarter.

Copper for three-month delivery on the London Metal Exchange jumped 0.4 percent, rising from a one-week low. Aluminum and zinc increased 0.3 percent and rubber futures due in February slipped 0.7 percent.

Soybean futures extended gains into a second day, rising 0.3 percent on signs rain in the U.S. Midwest failed to bolster crops in the world’s biggest producing nation. Corn futures added 0.2 percent and wheat climbed 0.3 percent.

Japan’s Topix Index fell 0.3 percent, while Tokyo Electron Ltd. surged by the exchange limit after Applied Materials inc. agreed to buy it for $9.39 billion in stock. The Kospi Index in Seoul slipped 0.6 percent. Australia’s S&P/ASX 200 Index halted a three-day drop to gain 0.5 percent, led by technology and consumer stocks.

Fed ‘Juice’

While the U.S. will release data on durable goods orders and new home sales today, investors are looking to the Oct. 4 payrolls report for clues on the timeline for reductions in monetary stimulus after the Federal Reserve unexpectedly left the program intact last week.

“If the Fed is going to continue to juice these markets ultimately they are going to continue to go higher,” Jim Bianco, president of Bianco Research LLC in Chicago, told Bloomberg TV. “It doesn’t mean the economy gets better but the markets can definitely go higher, with a lot more more volatility than we’ve usually seen.”

Price Swings

Ten-day volatility on MSCI’s Asia Pacific gauge climbed to 12.685, the highest level since Sept. 9. The Nikkei 225 Stock Average Volatility Index jumped a second day, rising 0.7 percent in Japan.

The Fed’s quantitative easing program may be pared later this year “if the economy were behaving in a way aligned with the Fed’s June forecast,” Fed Bank of New York President William C. Dudley said in an interview with CNBC. “I certainly wouldn’t want to rule it out. But it depends on the data.”

The number of workers on non-farm payrolls in the U.S. will rise by 177,000 for September, after gaining 169,000 in August, the Labor Department may say next week, according to the median of 14 estimates compiled by Bloomberg in a survey of economists. Most economists in a separate poll Sept. 18-19 said they expect the Fed to taper its bond buying program in December after unexpectedly leaving it unchanged last week.

Futures on Hong Kong’s Hang Seng Index added 0.2 percent in their most recent trading session, while contracts on the Hang Seng China Enterprises Index climbed 0.4 percent. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York dropped 1 percent as wireless carrier American depositary receipts slumped.

Beige Book

U.S.-based China Beige Book International said yesterday Chinese expansion has slowed since June as growth in manufacturing and transportation weakened, according to a Aug. 12 to Sept. 4 survey of 2,000 people as well as interviews.

Chanos, founder of Kynikos Associates Ltd., said at the Bloomberg Markets 50 Summit in New York that he isn’t convinced by signs of improvement in China’s economy and is maintaining bets on declines in the nation’s banks. Jim O’Neill, former chief economist at Goldman Sachs Group Inc. said on the same panel that the economy will double in five years to $16 trillion as China’s leaders are capable of reining in the housing and loan markets.

New Zealand’s currency, dubbed the kiwi, weakened 0.4 percent to 82.52 U.S. cents after sliding 1.1 percent yesterday in its biggest one-day tumble since Aug. 21. The South Pacific nation’s trade deficit widened to NZ$1.191 billion in August, more than the NZ$700 million gap predicted by economists surveyed by Bloomberg. Exports also fell more than projected, government data today showed.

Won, Ringgit

The won dropped the first day this week, losing 0.3 percent to 1,075.70 per dollar, as Malaysia’s ringgit slipped a fourth day, depreciating 0.3 percent to 3.2246 a dollar, set for the weakest close since Sept. 18.

The yen was little changed at 98.66 per dollar, after strengthening 0.7 percent the past three days. Japan’s currency is up 0.5 percent versus the greenback this quarter. The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major peers, was steady after gaining 0.2 percent yesterday.

Yields on 10-year U.S. Treasuries were little changed at 2.66 percent, after falling a third day yesterday. Similar maturity Australian bonds rose a second day, pushing yields down two basis points, or 0.02 percentage point, to 3.88 percent.

Budget Bunfight

Investors are also watching the debate in Washington over spending cuts as Senate Democrats offered a new proposal to fund the U.S. government through Nov. 15.

Hardening positions on the federal budget and borrowing limit, and recent political setbacks suffered by both President Barack Obama and Republican congressional leaders as they go into the fight, are raising the odds of a government shutdown, debt default or near-miss that could roil markets.

Treasury Secretary Jacob J. Lew, who spoke yesterday at the Bloomberg Markets 50 Summit, repeated that Obama won’t negotiate with Republicans on increasing the $16.7 trillion ceiling on the nation’s borrowing authority.

“I think that if you look at the calm out there, which I think is a bit greater than it should be, there’s a sense that 2011 was a terrible experience, and nobody would do that again,” Lew said.

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