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Banana Man piles into iron ore bubble

Monday 1 August 2016

You can’t keep a good Banana Man down and a falling USD is just what he needs to inflate the iron ore bubble some more. Dalian has shot up several percent this morning despite lackluster Chinese PMIs and rising port stocks, and Big Iron is following at a respectable distance with BHP 1.5%, RIO 1.1% and FMG 1.4%:

The FMG bubble has not quite reached new heights but its 58% discount has now trading at a monstrous -21.9%:

With the Fed on hold and Chinese data OK for now who knows how far Banana Man could run with this before it pops?

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.