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GLOBAL MARKETS-Oil edges off 2015 low but stocks stay slippery

Published 2015-12-08, 07:23 a/m
© Reuters.  GLOBAL MARKETS-Oil edges off 2015 low but stocks stay slippery
EUR/USD
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* Oil steadies after slumping to lowest level of the year
* Europe stock markets drop nearly 1 percent after Asia
tumble
* Wall Street set to open lower
* Bonds drip as oil price drop clouds rate view
* Euro, yen hold ground in the currency market

By Marc Jones
LONDON, Dec 8 (Reuters) - A surprise leap in Chinese
commodity imports helped steady the ship for oil prices and
energy-exposed currencies on Tuesday, although world stocks fell
for the second day emerging market bourses hit a two-month low.
Investors were still struggling for confidence after
Monday's 6 percent plunge in oil O/R had whacked it to its
lowest level of the year and the prospect of the first U.S.
interest rate hike in almost a decade next week also loomed.
European shares .FTEU3 were down 1 percent at their lowest
level since mid October as energy and mining stocks .SXPP fell
sharply again .EU and futures prices pointed to Wall Street
starting firmly in the red too. ESc1 ECONG7 ID:nU8N11S01A
Currencies of major oil exporting nations such as the
Canadian dollar CAD= and the Norwegian crown NOK= remained
edgy despite their stabilisation, while safe-havens like the yen
JPY= and the low-yielding euro EUR= did well.
"If you are looking to play weak oil prices you would want
to sell the Canadian dollar and the Norwegian crown," said
Jeremy Stretch, head of currency strategy at CIBC World Markets.
"With oil prices falling and some even talking about oil
falling to $30 a barrel, revenues for these countries will take
a beating and hence their currencies will remain under
pressure."
Internationally traded Brent oil futures LCOc1 were up 62
cents at $41.37 a barrel and U.S. crude CLc1 was at $38.02
ahead of U.S. trading, though there was little certainty from
traders that they would remain steady.
It has fallen 40 percent since early May, reviving global
deflationary pressures and concerns about how countries that
rely on it for revenues will cope.
Asian shares had been hit overnight too. Tokyo's Nikkei
.N225 ended down more than 1 percent despite data showing
Japan dodged recession in the third quarter ID:nL3N13W1A4 ,
while Chinese stocks fell 1.8 percent.
Though there was the surprise jump in commodities demand,
overall Chinese imports fell for the 13th consecutive month with
an 8.7 percent decline in November compared to a year earlier.
ID:nZZN07MB01
"Beyond the December hike (by the Federal Reserve),
investors are concerned about the lack of Chinese demand which
is acting as a millstone around the neck of risky assets," said
Cliff Tan, East Asian head of global markets at Bank of
Tokyo-Mitsubishi UFJ in Hong Kong.

GREECE SLIPS
Even normally ultra-safe bond markets provided little
refuge.
German and other northern euro zone government bond yields
nudged higher amid the lingering disappointment over last week's
ECB policy moves. Swiss yields climbed, too, as that also
dampened expectations of another Swiss National Bank rate cut
this month. GVD/EUR
Greek 10-year yields rose to their highest level in almost
three months, meanwhile, as concerns about the country's ability
to stick to its reform programme were stoked by critical
comments on the IMF from Prime Minister Alexis Tsipras.
He accused the Washington-based global lender of making
unrealistic demands both on Greece for tough reforms and on its
euro zone partners for debt relief beyond what they can accept.
"The Fund must decide if it wants to compromise, if it will
stay in the programme," Tsipras said. "If it does not want that
compromise, it should say so publicly." ID:nL8N13W4FO
Other than that it was all about what is expected to be the
first post-financial crisis rise in U.S. interest rates on Dec.
16 for bond markets.
Federal funds futures contracts FFcm1 imply an 80 percent
chance that the Fed will end seven years of near-zero interest
rates at its December meeting and about even odds of a second
rate rise by March.
Long-dated U.S. Treasury debt prices held firm after
rallying on Monday as the drop in oil prices pointed to benign
inflation, potentially tempering the Fed's policy tightening
path.
On the currencies front, action around the China trade data
was brief with the Australian dollar settling to new intraday
lows at $0.7224 AUD=D4 and receding further from a 3-1/2 month
high of $0.7386 touched on Friday.
The euro was firm at $1.0856 EUR= following last week's
less-than-aggressive ECB stimulus and the offshore Chinese yuan
CNH=D4 traded at a three-month low of 6.4930 per dollar
despite another lower-than-expected fixing by China's central
bank.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Commodities performance http://link.reuters.com/rac73w
Currencies vs dollar http://link.reuters.com/tak27s
Commodities performance http://link.reuters.com/rac73w
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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