Global stocks rise as China's commodity crackdown eases inflation worries, while bitcoin stabilizes
- Global stocks rose on Monday as investors shrugged off inflationary pressures.
- China's crackdown on commodity prices could help ease concerns of higher costs.
- Bitcoin recovered to around $36,700 after a rollercoaster weekend of trading.
Global stocks rose on Monday as easing inflation worries bolstered markets, and bitcoin rallied from last week's lows.
Futures on the Dow Jones, S&P 500, and Nasdaq rose 0.5%, suggesting a higher start to trading later in the day.
The Nasdaq posted its first weekly gain in five weeks. Cyclical sectors underperformed their growth counterparts, with banks sliding back as yields fell slightly. The yield on the 10-year Treasury note saw its fifth drop in the last seven weeks to 1.617%.
Bitcoin continued a volatile session after sizeable downswings last week. The digital asset rose back above $40,000 on Friday, traded as low as $31,133 on Sunday afternoon, and recovered to around $36,700 on Monday. Ethereum's ether, Litecoin, and Ripple's XRP saw similar movements over the weekend.
The largest cryptocurrency by market cap is on track for its worst monthly performance in almost a decade, having lost over 37% since its April high, Deutsche Bank strategists said.
Some central bank rate decisions are expected this week including from New Zealand, South Korea, and Indonesia. Deutsche Bank economists expect the latter two to keep their policy rates steady, while markets will be eyeing forecast revisions for clues to their policy bias.
China's economic planning agency said on Monday that it would escalate efforts to curb soaring commodity prices to crack down on monopolies within the market. Prices of iron ore, the ingredient used in steelmaking, fell sharply with the main futures contract sliding 7% to $163 a tonne on China's Dalian exchange.
Given that China is a large net importer of ores, there is a limit to what they will be able to achieve in the medium to long term, according to Jeffrey Halley, a senior market analyst at OANDA. "However, in the short-term, their rumblings seem to be having the desired effect," he said.
China's Shanghai Composite rose 0.3%, Japan's Nikkei rose 0.2%, and Hong Kong's Hang Seng rose 0.04%.
Elsewhere in Europe, EU leaders will be meeting in Brussels over Monday and Tuesday for a special summit to discuss matters including the COVID-19 response, relations with Russia and the UK, and climate change.
"A crackdown on commodity prices in China allowed the European markets to creep higher on Monday," said Connor Campbell, a financial analyst at SpreadEx. Tackling the "speculators and hoarders" that have so aggressively driven up the price of raw materials, China warned it would show zero tolerance towards the "excessive speculation" of recent months, he said.
London's FTSE 100 rose 0.3%. Germany and France have a public holiday.