Commodities ended February on a solid note as the US dollar sold off on renewed fears of a slowing manufacturing sector.
Oil ended up more than 3% on the day in New York and 1% for February, which is a big rebound from the weak January.
Wall St fell in late trading to be down on the day and month for the S&P 500 and Nasdaq, but the Dow had a small gain. Our market lost 3.5%, but that was a big comeback from being down more than 20% mid month. But today the futures market is showing a weak start to new month with a 16 point loss on the ASX.
The RBA board meeting today is not seen as cutting rates here in Australia.
Oil prices have risen 16% since Saudi Arabia, Russia, Venezuela and Qatar tentatively agreed on February 16 to cap production at January levels – a move that still hasn’t been bedded down with other producers.
Bent crude rose 2.5% on the day and ended higher for the month.
US gold futures settled higher overnight Monday for their largest monthly gain in almost four years. Some traders also pointed to demand from Chinese buyers as a factor supporting an jump the yellow metal’s price on Monday.
Helping sentiment was the news that the Chnese central bank had again eased its reserve asset ratios for banks, making available more than $US100 billion for new lending and helping ease liquidity in the Chinese financial system.
It was the first easing since last October though as the central bank has been using regular cash injections to maintain liquidity as tens of billions of dollars flow out of the country and into global bolt holes and markets.
On top of that more data emerged suggesting US manufacturing activity is slowing and some economists are saying a weak jobs report for last month on Friday night might be such a surprise.
Not helping was surprise news of a deepening of deflation in the eurozone last month. The unexpected drop in inflation in the eurozone sent bond yields in Germany, France and Italy lower.
The initial estimate of eurozone inflation for February fell to negative 0.2%, back below zero after four months of positive readings, including an increase of 0.5% in January.
Comex April gold added $US14, or 1.2%, to settle at $US1,234.40 an ounce, after falling sharply on Friday.
Still, the precious metal climbed roughly 10.5% in February, marking its biggest percentage advance for a most-active contract since January 2012, when the price of the metal surged 11.1%, according to FactSet figures.
Comex May silver, rose 20.4 cents, or 1.4%, at $US14.918 an ounce, for a 4.6% monthly gain. And Comex May copper settled at $US2.133 a pound, up less than a cent for the session, and about 3% for the month.
On Wall Street shares fell in the final two hours of trading for February to end the day and monthlower.
The S&P 500 and Nasdaq Composite had their third consecutive monthly declines, finishing February down 0.4% and 1.2% respectively.
The S&P 500 index closed 15.83 points, or 0.8%, lower at 1,932.22.
The Dow dropped 123.47 points, or 0.7%, to 16,516.50, but eked out a monthly gain, finishing 0.3% higher over the month while the Nasdaq Composite ended the day down 32.52 points, or 0.7%, at 4,557.95.
But Australian market lost 2.3% last month, but it bounced back from being in bear territory, rising 175 points from its intra-month low of 4706.7 for the ASX 200. It is also a significant improvement on January’s performance, when the market lost 5.5%.
Australia also outperformed many of its regional peers last month such as Tokyo where the Nikkei shed around 8% and Shanghai which lost 3% (including a 2% plus fall yesterday).
