WTI crude oil traded at the Intercontinental Exchange was most recently higher by $1.26 to $50.11 per barrel and has risen by more than $13 since New Year's Eve. The oil rally is propelling the Canadian dollar which is the best-performing G10 currency, rising 0.0036 to 0.8449 USD.

"Geopolitical tensions continued to support oil prices, as Israel's offensive in the Gaza strip continued despite international calls for a ceasefire," said Yingxi Yu, commodity analyst at Barclays Capital.

Other commodities are also higher, with the exception of gold. Copper has climbed 6% to a one-month high of $1.5580 per pound.

Natural gas futures are 2.6% higher after a breakdown in discussions between Russia's Gazprom and the Ukraine. The EU Presidency said that reductions in natural gas supplies to European states is not acceptable and demanded that deliveries be restored immediately.

"We still have the war in the Gaza strip and Nigeria supplies at risk from Nigerian rebel groups but today it's about the gas and nothing but the gas," said Phil Flynn, energy analyst at Alaron.

The rises in commodity prices come despite general U.S. dollar strength. The greenback is higher against every major currency except the Canadian dollar. The USD is up 0.94 to 94.34 against the yen and the Dollar Index is up 1.141 to 83.778.

The euro is down 0.0254 to 1.3382 against the U.S. dollar, lower by 0.0357 to 1.5849 against the Canadian dollar, down 0.0067 to 0.9208 against the pound sterling and is lower by 1.01 to 126.29 against the yen.

The pound sterling is down 0.0160 to 1.4539 against the U.S. dollar and down 0.0256 to 1.7218 against the Canadian dollar.

Equity markets futures are pointing to a stronger open and fixed income yields are higher across the curve.

U.S. equity market futures are higher with contracts on the Dow Jones industrial average up 61 points to 8979, the S&P 500 up seven points to 935 and the Nasdaq up 12 points to 1277.

European stock markets are also higher, with the Eurostoxx up 46 points to 2230, the UK FTSE 100 up 76 points to 4656 and the German DAX up 96 points to 5080.

Asian markets were mixed, with the Japanese Nikkei closing up 38 points to 9081 and the Hang Seng Index down 54 points to 15510.

U.S. two-year yields are up 7.1 bps to 0.84%, with five-year yields up 4.6 bps to 1.72%, 10-year yields up 6.1 bps to 2.54% and 30-year yields up 6.0 bps to 3.09%. The Eurodollar March 09 contract is down 4.5 ticks to 98.87. The yield curve is flatter, with the 10/2-year spread down 0.7 bps to 170.86 bps.

Yields on two-year Canadian government bonds are up 1.9 bps to 1.18%, with five-year yields up 1.8 bps to 1.88%, 10-year yields up 1.4 bps to 2.90% and 30-year yields up 2.6 bps to 3.66%. The December 08 BAX contract is up 9824.6 ticks to 98.25.

In Germany, returns on two-year German bonds are up 4.8 bps to 1.74%, with five-year yields up 9.8 bps to 2.41%, 10-year yields up 11.4 bps to 3.13% and 30-year yields up 15.6 bps to 3.71%.

Yields on UK two-year bonds are down 1.5 bps to 1.83%, with five-year yields up 2.2 bps to 2.85%, 10-year yields up 8.9 bps to 3.24% and 30-year yields up 12.0 bps to 3.96%.

All data taken at 8:44 a.m. EST.

By Adam Button, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it

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