Gloomy mood prevails despite calmer commodities

(Updates with fresh detail)
LONDON, Dec 9 (Reuters) - Commodity prices caught a break
from a bruising sell-off on Wednesday, helping to put global
equities on a slightly steadier footing after a rough week
driven by fears over global demand.
The mood was far from euphoric, though, with European
markets underperforming and U.S. equity futures edging down.
Traders warned that markets were likely to give up their gains
throughout the day and investors were preparing portfolios for
year-end rather than making major new reallocations.
Economic data offered little to cheer about. China's
consumer inflation picked up but remained under the government's
2015 price target of 3 percent. The ripple effects of China's
slowdown was evident in Europe, where German imports fell in
October and exports also weakened.
"We are in a time when hedge funds are closing their books
and people still haven't given up on a rally before the end of
the year," said Markus Huber, a London-based trader at Peregrine
& Black. "It does not look like Europe can hold onto the
(positive) momentum."
European equities were underperforming a broadly flat MSCI
All-Country World index .MIWD00000PUS at 1221 GMT. The
pan-European FTSEurofirst 300 .FTEU3 was down 0.6 percent,
with benchmark indexes in London, Paris and Frankfurt down
around 0.2 to 0.9 percent after opening higher.
The euro inched higher and German bond yields were broadly
flat. The dollar was down 0.4 percent against a basket of six
major currencies .DXY .
Calmer commodity prices helped steady sentiment. U.S. crude
CLc1 traded 41 cents higher at $37.92 per barrel and Brent
LCOc1 rose to $40.55, a slight respite from a year-long
battering for commodities linked to worries about a slowdown in
China and emerging markets.
But mining stocks see-sawed, with Anglo American AAL.L
slumping more than 10 percent to a fresh all-time low.
Highlighting the plight of the broader commodity markets,
the Thomson Reuters Core Commodity CRB index .TRJCRB on
Tuesday fell to its lowest since November 2002.
Analysts pointed to the weak Chinese yuan as a factor
deepening the gloom for commodity exporters.
"A weakening of the CNY sounds alarm bells for the many
exporters that worry that Chinese demand will be dampened by a
weaker currency," wrote Angus Nicholson, market analyst at IG in
Melbourne.
The currency has weakened significantly after China's
devaluation in August and the People's Bank of China (PBOC) set
the yuan midpoint rate CNY=SACE at a four-year low.
Some still consider the yuan overvalued and expect it weaken
further when it joins the IMF's Special Drawing Rights (SDR)
currency basket. In theory, the yuan's SDR inclusion would mean
the PBOC may have to relinquish some of its control over the
currency.
OPEC's decision on Friday not to cut its production target
has sparked concerns global oil producers will pump even more
crude into an already oversupplied market.