(Bloomberg News) Commodities, led by oil, beat stocks, bonds and the dollar for the first time since July as the European Union prepared to embargo Iranian crude, the U.S. economy improved and China took steps to shore up growth.
The Standard & Poor's GSCI Total Return Index of 24 raw materials rose 6.5 percent in February, extending the previous month's 2.2 percent gain, as Brent crude advanced 11 percent. The MSCI All-Country World Index of shares increased 4.8 percent, extending stocks' best start to a year since 1991. Bonds of all types were little changed on average, according to Bank of America Merrill Lynch's Global Broad Market Index. The Dollar Index slid 0.6 percent.
"There has been a confluence of perfect factors for commodities," said Harry Tchilinguirian, head of commodity- markets strategy at BNP Paribas SA in London. There "are the oil-supply constraints with geopolitical tensions escalating in Iran. There was also positive economic news out of China and the U.S," he said.
Brent crude futures had their biggest monthly gain in a year in February as the EU said Jan. 23 it would impose an embargo from July on Iran's oil to pressure the nation over its nuclear program. The Persian Gulf country, OPEC's second-biggest producer, stopped selling oil to Britain and France on Feb. 20.
The International Atomic Energy Agency said Feb. 24 that Iran dismissed the concerns of its inspectors during a two-day visit to Tehran and had tripled its quarterly rate of producing 20 percent-enriched uranium.
Greek Bailout
The number of Americans filing first-time claims for jobless benefits reached a four-year low in the week ending Feb. 18, Labor Department data showed, while an index of U.S. leading indicators advanced. In China, the central bank announced a second reduction in bank reserve requirements in three months to bolster lending. Greece got a 130 billion-euro ($173 billion) bailout from the EU and the International Monetary Fund on Feb. 21 in return for spending cuts and economic reforms.
The S&P GSCI index is off to its best start since 2008, rising 9.4 percent as of today, partly as declines in the U.S. currency boosted the allure of investments priced in dollars and company earnings beat analysts' estimates. February's gains were the biggest since October, as sugar and soybeans rose.
"A shock-free earnings season, improving macro-economic data out of the U.S., progress on the bailout package for Greece and a weaker dollar have helped support elevated levels of risk appetite and one clear beneficiary of that has been the commodities asset class," said Ashish Misra, the London-based head of investment research at Lloyds TSB Banking Group Plc's private-banking unit, which manages about $19 billion.
Oil Gains
Brent, the benchmark grade for more than half the world's crude, rose 11 percent in February and traded at $125.55 a barrel on Feb. 24, the highest level since May. It was at $125.02 at 5:45 p.m. London time today. West Texas Intermediate, the main U.S. crude, advanced 8.7 percent, rising to $109.95 on Feb. 25. It was at $108.08 a barrel today.