Oil surges as non-OPEC,OPEC producers agree on output cuts

Oil prices jumped more than 5 % on Monday after OPEC and non-OPEC producers agreed to curb oil output and ease a global glut, while the U.S. dollar extended gains ahead of an expected rate hike this week.

                    Commodity currencies and energy shares were also pulled higher, adding to bullish sentiment after another day of strong gains on Wall Street on Friday.Energy and resources shares helped pull Australia's benchmark share index up 0.3 percent, but MSCI's broadest index of Asia-Pacific shares outside Japan was flat after posting its biggest weekly rise in nearly three months last week.


  "Investors who have been overweight cash and fixed interest are continuing to push stocks higher as confidence builds," Ric Spooner, chief market analyst at CMC Markets in Sydney, said in a note.On Friday, a preliminary survey from the University of Michigan showed the U.S. consumer sentiment index at its highest since January 2015, which may spur the Fed to strike a confident tone on the economy's outlook when it starts a two-day meeting on Tuesday for the final policy meeting of 2016. 

 

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Futures markets have virtually priced in a rate increase this week while the greenback gained fresh legs from the data, posting a 10-month high against the Japanese yen and standing tall against a trade-weighted basket of its peers.The euro was trading near a one-year low against the dollar with the single currency changing hands at 1.053 per dollar. Analysts at BBH expect a rebound to 1.07 per dollar if the 1.05 level is not broken.

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