* S&P futures up 0.7%, European stocks gain 0.82%
* MSCI world stocks eyeing 2.4% weekly rise
* Copper falls more than 7% on week, oil down 3%
* German 10-year bond yields drop 5 bps
*
By Carolyn Cohn and Tom Westbrook
LONDON/SINGAPORE, June 24 (Reuters) - Global stocks and
benchmark U.S. bonds headed for their first weekly gain in a
month on Friday, with economic growth worries tempered by a view
that sliding copper and other commodity prices could brake
runaway inflation.
The week has been marked by steep declines for commodities
on concern that the world economy is looking shaky and that
interest rate hikes will hurt growth - which in turn is
prompting traders to cut inflation expectations and pare back
some bets on the size of the hikes.
"Inflation will remain elevated and above target but it's
increasingly likely it will start to peak over the next few
months," said Andrew Hardy, investment manager at Momentum
Global Investment Management.
"Markets could take that reasonably well - there's potential
for recovery later in the year."
Copper, a bellwether for economic output with its wide range
of industrial and construction uses, is heading for its steepest
weekly drop since March 2020. It fell in London and
Shanghai on Friday and is down more than 7% on the week.
Tin dropped 9.7% to $24,380 a tonne, its lowest
since March 2021 and on track for a weekly percentage fall of
nearly 22%, its biggest on record.
Brent crude futures are down over 3% on the week to
$109.70 a barrel and off 10% for the month, while benchmark
grain prices sank, with Chicago wheat off more than 8% for
the week.
Gold was up 0.29% at $1,828.50 per ounce but was
heading for a second straight weekly fall.
The drops have offered some relief to equities since energy
and food have been the drivers of inflation. After heavy recent
losses, MSCI's World equities index was up 0.3%
on the day and 2.4% this week, setting it up for the first
weekly gain since May.
U.S. S&P futures rose 0.7% after Wall Street's main
indexes posted solid gains on Thursday.
European stocks rose 0.82%, on course to post small
weekly gains. Britain's FTSE rose 0.73%, also showing a
small uptick on the week.
"While market worries about an abrupt slowdown are the
culprit behind recent moves lower in raw materials prices, lower
commodity prices do feel like they could be just what the doctor
ordered for the global economy," said NatWest markets strategist
Brian Daingerfield.
"So much of our hard-landing fears relate to concerns that
link back to commodity prices."
The Federal Reserve's commitment to reining in 40-year-high
inflation is "unconditional," U.S. central bank chief Jerome
Powell told lawmakers on Thursday, while acknowledging that
sharply higher interest rates may push up unemployment.
Germany is heading for a gas shortage if Russian gas
supplies remain as low as they are now due to the Ukraine
conflict, and certain industries would have to be shut down if
there is not enough come winter, Economy Minister Robert Habeck
told Der Spiegel magazine on Friday.
German business morale fell more than expected in June.
Bonds rallied hard on hopes that bets on aggressive rate
hikes would have to be curtailed, with German two-year yields
sliding 26 basis points on Thursday in their biggest
drop since 2008.
The German 10-year yield was down 4 bps on Friday after
slumping 29 bps on Thursday, and was heading for its first
weekly drop since mid-May.
The benchmark 10-year Treasury yield was steady
at 3.0666% after falling 7 bps on Thursday and
Bond funds suffered their largest outflows since April 2020
in the week to Wednesday while equities lost $16.8 billion as
markets were stuck in maximum bearish mode, BofA's weekly
analysis of flows showed on Friday.
The U.S. dollar has slipped from last week's 20-year
highs. It was steady at $1.0529 per euro and dropped
0.2% to 134.67 yen.
The battered yen has steadied this week and drew a little
support on Friday from Japanese inflation topping the Bank of
Japan's 2% target for a second straight month, putting more
pressure on its ultra-easy policy stance.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 1.1%, helped by short sellers bailing out
of Alibaba (BABA) - which rose nearly 6% - amid hints that
China's technology crackdown is abating.
Japan's Nikkei rose 1.2% for a 2% weekly gain.
(Additional reporting by Brijesh Patel in Bengaluru and Sam
Byford in Tokyo; editing by Jacqueline Wong and John
Stonestreet)
Log In Required
Line of Credit Log In Required
