World stocks struggled at a five-and-a-half-week low yesterday, though metals dazzled with zinc at its highest in a decade, copper hitting a nearly three-year high and iron ore’s gains in the last three sessions stretching to nearly 15 per cent.
Traders were digesting the latest departure from Donald Trump’s White House team, watching tensions around North Korea and waiting to see what the world’s top central bankers would signal at the annual Jackson Hole gathering later this week.
European stocks clawed back most of an early 0.2 per cent dip, as M&A activity helped shipping giant Maersk jump and the rally in metals sent Rio Tinto, BHP Billiton and Anglo American higher.
Zinc had hit its highest since October 2007 at $3,180.50 a tonne, bellwether industrial metal copper rallied to $6,593 a tonne, its highest since November 2014, and nickel, used in stainless steel, gained over two per cent as it reached a 2017 peak.
In the currency market, the dollar remained hampered by Friday’s latest departure from Mr Trump’s top team.
This time it was chief strategist Steve Bannon, a driving force behind his nationalist and anti-globalisation agenda.
Mr Trump is due to address a problem that vexed his two presidential predecessors. He will detail his strategy for the war in Afghanistan, America’s longest military conflict, which is expected to include a modest boost to troop numbers.
The dollar fetched 108.970 yen, not far from Friday’s four-month low of 108.605.
The euro was also in the doldrums, stuck at $1.1760 as it consolidated last week’s biggest weekly decline in more than two months.
Investors are looking to European Central Bank chief Mario Draghi’s comments later this week at a meeting of the world’s central bankers in Jackson Hole, Wyoming.
Sources told Reuters last week he would not deliver any fresh policy messages.
Federal Reserve Chair Janet Yellen’s keynote speech will also be closely scoured for clues on its next move.
Comments last week from Fed officials suggested the stock market’s steady rise, still low long-term bond yields and a sagging dollar, are strengthening the Fed’s intent to raise interest rates again this year despite caution about weak inflation.
Meanwhile, oil markets steadied after big gains on Friday, which were triggered by cuts in oil rigs by US drillers.
US crude futures fetched $48.64 per barrel, while Brent futures were down fractionally at $52.69 per barrel.
In fixed income, the 10-year US Treasuries yield stood at 2.181 per cent, having slipped on Friday to 2.162 per cent – its lowest since late June.