Asian Stocks Set for Weekly Gain as Metals Advance With Ringgit 

Optimism that the Federal Reserve will take a gradual approach to raising interest rates sent Asian equities toward their biggest weekly gain in more than a month and buoyed the region’s currencies. Metals advanced and oil traded near a three-month low.

The MSCI Asia Pacific Index rose 0.3 percent, extending held Thursday’s 1.9 percent advance, as shares in New Zealand and Australia climbed with those in emerging markets. Gold added 0.4 percent and zinc jumped 3 percent. Crude in New York traded at $40.54 a barrel. Malaysia’s ringgit strengthened 1.9 percent, leading Asian currencies higher. Investors showed few signs of unease after the U.S. central bank signaled this week it’s likely to raise interest rates next month.

“The Fed has made it clear that its base case is for a lift-off in December and if they were to break that, it would be a huge, market-moving event,” said Evan Lucas, Melbourne-based strategist at IG Ltd. “It’s been very positive for markets this week, with equities responding favorably to this macro picture.”

Stocks

The Philippine PSEi Index jumped 0.6 percent and the Jakarta Composite Index rose 0.4 percent. Thailand’s SET Index climbed 0.5 percent and Vietnam’s Ho Chi Minh Stock Index was 0.7 percent higher.

Futures on the Standard & Poor’s 500 Index were little changed, with the underlying gauge up 2.9 percent in the past four days. The MSCI Asia Pacific Index is up 1.6 percent on the week.

Japan’s Topix index rose 0.2 percent on Friday, poised for a fifth straight weekly advance. Hong Kong’s Hang Seng Index gained 0.2 percent and the Hang Seng China Enterprises Index added 0.4 percent. Australia’s S&P/ASX 200 Index advanced 0.3 percent and New Zealand’s S&P/NZX 50 Index climbed 0.2 percent.

Currencies

The ringgit headed for its biggest gain in more than a month, advancing to 4.2595 per dollar, following a 1 percent gain on Thursday. The Bloomberg JP Morgan Asia Dollar Index, a measure of the region’s currencies, was 0.1 percent higher.

“Everyone’s backing away from the dollar and locking in profits,” said Michael Every, head of financial markets research at Rabobank Group in Hong Kong. “Nothing has changed for the positive for Malaysia. I still think we’ll test towards 4.50. We’ve got the dollar strengthening and softness in commodities and weakening in the Chinese currency yet to come.”

The yen was at 122.78 per dollar after gaining 0.6 percent on Thursday as the central bank left monetary policy unchanged and said “inflation expectations appear to be rising.” Governor Haruhiko Kuroda, who unleashed unprecedented monetary stimulus at the Bank of Japan in 2013 and doubled down on it last year, is done expanding his efforts, according to an increasing number of economists. Japan’s two-year bond yield dropped to minus 0.03 percent, the lowest since January, declining for a fourth day.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency versus 10 major counterparts, was little changed Friday. The gauge’s 0.7 percent Thursday retreat saw the greenback slide most against the currencies of resources producers including New Zealand, Brazil and Australia. Commodity currencies have tumbled this year amid a collapse in raw materials prices and on concern the first U.S. rate increase since 2006 would further dent global growth.

Commodities

Zinc climbed as much as 3.2 percent to $1,579.50 a metric ton on the London Metal Exchange, before trading at $1,576.50. LME copper rose 0.7 percent to $4,664 a ton, paring a sixth weekly decline.

Oil headed for a third weekly decline on signs a global glut will be prolonged amid the longest run of U.S. stockpile gains in seven months. West Texas Intermediate futures dropped below $40 a barrel Wednesday for the first time since August.

Gold extended an advance from a five-year low as Fed Vice Chairman Stanley Fischer said that U.S. policy makers have done their best to prepare international markets for higher borrowing costs. Bullion for immediate delivery was at $1,086.42 an ounce from $1,082.21 on Thursday, when prices gained 1.1 percent, according to Bloomberg generic pricing. Palladium jumped 1.8 percent.

Source: Bloomberg – Asian Stocks Set for Weekly Gain as Metals Advance With Ringgit

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