Oil retreats below $47 before OPEC meeting as rand falls on Zuma

Bloomberg.- Oil retreated back below $47 as OPEC members failed to bridge differences on production cuts, while a rally in metals ran out of steam. The rand plunged after President Jacob Zuma survived a leadership threat.

Commodity and energy producers were the biggest decliners in the Stoxx Europe 600 Index. Crude slid as Iraq and Iran raised objections over the distribution of output reductions and Russia said it’s not planning to attend crucial talks with the Organization of Petroleum Exporting Countries on Wednesday. Copper slumped for the first time in seven days and the Bloomberg Dollar Spot Index ended a two-day loss.

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“We have a very important OPEC meeting and there’s a flow of expectations in front of this meeting, therefore the oil price is shaky as well as oil-related companies,” said Herbert Perus, head of equities at Raiffeisen Capital Management in Vienna, which manages 30 billion euros ($32 billion).

With the market giving just 30 percent odds to an agreement to end the oil supply glut, according to Goldman Sachs Group Inc., pessimism about the make-or-break talks is helping to damp a commodities rally following Donald Trump’s surprise presidential election. Investors will get further insight on the U.S. economy this week with gross domestic product data on Tuesday and a payrolls report on Dec. 2.

Commodities

– West Texas Intermediate crude slipped 2.1 percent to $46.11 a barrel as of 7:12 a.m. in New York, after rising 2.2 percent on Monday.

– Copper futures dropped 1.6 percent on the London Metal Exchange, nickel lost 2.3 percent while zinc declined 1 percent.

– Gold for immediate delivery fell 0.6 percent following last session’s 0.9 percent jump.

Currencies

– The rand depreciated 2.1 percent, the biggest slide among major currencies, after Zuma staved off a bid by officials in the ruling party to oust him.

– The yen weakened 0.7 percent to 112.71 per dollar, set for its biggest monthly drop since 2009, amid speculation that Trump will pursue inflationary spending and tax policies prompting a faster pace of monetary-policy tightening by the Federal Reserve.

– Bloomberg’s dollar gauge, which tracks the greenback against 10 major peers, increased 0.1 percent.

– The Norwegian krone dropped 0.3 percent.

– The South Korean won edged 0.2 percent higher as President Park Geun-hye said she’s willing to resign amid an influence-peddling scandal.

Stocks

– The Stoxx Europe 600 Index was little changed, after dropping 0.8 percent Monday.

– Gains exceeding 3.3 percent in UBI Banca SpA and Banca Monte dei Paschi di Siena SpA helped lift the FTSE MIB Index from a two-month low.

– Actelion Ltd. lost 6.1 percent after the Financial Times reported the drugmaker is discussing a complex transaction with Johnson & Johnson that would allow it to remain independent. The Swiss stock surged on Friday after confirming talks without giving details.

– Futures on the S&P 500 Index and those on the Dow Jones Industrial Average each added 0.1 percent.

Bonds

– Italian 10-year bonds advanced, with the yield falling eight basis points to 1.99 percent as the nation sold 6.2 billion euros of securities due between 2021 and 2026.

– Prime Minister Matteo Renzi’s office denied news reports that he is considering stepping down even if he wins the Dec. 4 referendum on constitutional reform.

– Yields on French bonds maturing in a decade dropped eight basis points to 0.69 percent.

– Treasury 10-year note yields rose one basis point to 2.32 percent, after falling five basis points on Monday.

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