Commodities dropped, led by nickel, lead and gasoline, on speculation that the Federal Reserve and other central banks will curtail bond purchases after Bank of Japan Governor Haruhiko Kurado said he sees no need to expand monetary stimulus immediately.
Copper futures fell from a one-week high as imports dropped to the lowest in 22 months in China, the world’s biggest user of industrial metals, while speculation emerged that the Federal Reserve may scale back U.S. stimulus.
Investors dumping bonds from Europe’s most indebted governments are turning to fixed-income markets in Sweden, Finland, Norway and Denmark for shelter, said Bill O’Neill, chief investment officer for Europe, the Middle East and Africa at Merrill Lynch Wealth Management.
Merrill Lynch Global Wealth Management is shunning “expensive” debt from the U.S., U.K. or euro-region core in favor of local-currency denominated Asian bonds as a global double-dip recession is unlikely.
Gold is poised to rise above $2,000 an ounce next year, while lack of clarity on demand outlook and policies in China dim prospects for industrial metals, according to Merrill Lynch Wealth Management, which oversees more than $1.8 trillion for clients.