The People’s Bank of China has cut the reserve requirement for the country’s banks, providing a boost for commodities.
From February 24, the amount of cash that banks must set aside as reserves has been cut by half a percentage point.
This is the second cut in three months and provides more evidence of China loosening its economic policy.
Today will also see a meeting of eurogroup finance ministers in Brussels that should lead to an agreement on dealing with Greek sovereign debt. Markets are optimistic that there will be a resolution.
As a result of both of these, primary commodities have risen in price.
Three-month copper was up this morning to $8,288 (£5,229) having fallen 6.7 per cent over the previous six sessions.
Aluminium was also up 0.8 per cent to $2,182 (£1,377), while lead increased 1.2 per cent to $2,069 (£1,305).
The S&P GSCI index of 24 commodities rose to 689.75, which is the highest it has been since 1 August.
Brent crude oil has also broken the important $120 a barrel barrier to reach $120.78. This has been fuelled by rising tensions over Iran’s nuclear programme and the possibility of sanctions again the country. While WTI oil in New York increased 1.9 per cent to $105.21.