Asian stocks rose with European and U.S. equity index futures as a rebound in oil bolstered risk appetite ahead of heavily-anticipated central bank policy meetings this week. A gauge of the dollar retreated from a seven-week high, while yuan borrowing costs surged in Hong Kong.

An MSCI index of regional stocks advanced following its biggest weekly drop in three months. The Australian dollar and Mexico’s peso were among the biggest gainers against the greenback, with crude climbing from a one-month low as fighting disrupted supplies from Libya amid prospects major producers will act to stabilize prices. Overnight yuan borrowing costs in Hong Kong soared the most since January amid speculation China’s central bank is intervening to fend off bearish currency bets.

Volatility has picked up in financial markets over the past two weeks amid concern central banks in Europe and Japan are becoming reluctant to loosen monetary policy further at a time when the Federal Reserve is deciding on the timing of the next U.S. interest-rate increase. Economists are split over what, if any, action the Bank of Japan will undertake in a review on Wednesday. While the chance of a Fed hike the same day remains around 20 percent, a steeper-than-projected increase in U.S. consumer prices boosted the dollar on Friday and spurred bets that borrowing costs will be raised in December.

“Sentiment is being boosted by a rebound in oil,” said Vasu Menon, vice president for wealth management research at Oversea-Chinese Banking Corp. in Singapore. “Investors are also hoping the BOJ will do something more dramatic though I don’t think that’s going to make a lot of difference. With inflation numbers picking up a little bit in the U.S., the market will start worrying about the Fed again at some stage down the road.”

Japan’s markets are closed Monday for a holiday. South Korea returned after a three-day break, while markets in mainland China and Taiwan were shut on Thursday and Friday. Hong Kong and Malaysia were closed on Friday.

Stocks

The MSCI Asia Pacific excluding Japan Index climbed 1.2 percent as of 7:03 a.m. London time, after sinking 2.4 percent last week. Australian equities were little changed after a technical glitch led to a delayed start and early close for the local bourse.

Taiwan’s Taiex index surged 2.8 percent from Wednesday’s close, the biggest jump in a year, as suppliers of Apple Inc. rallied amid booming demand for iPhone 7 handsets. A gauge of Chinese companies’ shares listed in Hong Kong headed for the steepest gain since May following a pickup in mainland demand for shares in the city.

“Mainland buying will probably continue in following months as concerns about a weaker yuan is rising,” said Chen Hao, a strategist at KGI Securities Co. in Shanghai. “Low valuations of Hong Kong stocks also make them a preferred target.”

Futures on the Euro Stoxx 50 Index rallied 0.9 percent, as did those on the U.K.’s FTSE 100 Index. S&P 500 Index contracts rose 0.4 percent.

Currencies

Australia’s dollar strengthened 0.7 percent versus the greenback, buoyed by the pickup in oil prices and the A$9.7 billion ($7.3 billion) sale of a 50-year lease in Australia’s busiest port to a group of global investors. Among the currencies of other crude-exporting nations, the Mexican peso added 0.7 percent, the Canadian dollar rose 0.5 percent and the Norwegian krone was up 0.3 percent.

The Bloomberg Dollar Spot Index fell 0.3 percent following a 0.7 percent advance on Friday, when data showed the U.S. consumer-price index climbed 0.2 percent after being little changed in July. Economists predicted a 0.1 percent increase, a Bloomberg survey showed. The Japanese yen gained 0.3 percent and the British pound rose 0.4 percent.

The yuan weakened 0.2 percent in offshore trading to 6.6674 per dollar even as the cost of borrowing the currency surged, making it costlier to bet on depreciation. The yuan’s overnight interbank rate in Hong Kong jumped 15.7 percentage points to 23.7 percent, its second-biggest gain on record. One- and three-month funding costs also increased, though by smaller increments.

“The result is to support the currency at a time when 6.70 suddenly seems a very important line in the sand,” said Michael Every, Hong Kong-based head of financial markets research for Asia-Pacific at Rabobank Group. “You’d almost think it was a pegged currency.”

Taiwan’s dollar rose 0.8 percent from where it finished on Wednesday, leading gains among major currencies.

Commodities

Crude oil added 1.7 percent to $43.78 a barrel in New York, following a 6.2 percent slide last week. Clashes at Libya’s Ras Lanuf port are supporting prices, after they halted what would have been the first overseas crude shipment from that site since 2014. The head of OPEC said the group may call an extraordinary meeting if major producers reach consensus on an accord to stabilize oil prices at informal talks next week in Algiers.

Copper dropped from a four-week high in London as Anglo American Plc restarted operations after a strike at its Los Bronces mine in central Chile, bolstering supply from the world’s largest producer. Nickel gained 2.2 percent, after a 6.2 percent weekly slide that marked its biggest loss since November.

Gold rose 0.5 percent, after sliding 1.3 percent last week. Speculators cut their bets on a bullion rally by the most in more than three months during the week ended Sept. 13 and holdings in global exchange-traded funds backed by the metal are heading for the biggest monthly decline this year.

Source: Bloomberg