Morgan Stanley is right today: Since mid-June, commodity price performances have been dominated by a currency trade. So what events could terminate this driver? Currencytrade, mostly: Over the last 8-10 weeks, ithas been increasingly difficult for us to identify the fundamental basis of the general lift in commodity prices (now >15-40% since mid-June). Yes, prices
DXY was pulverised last night before putting in the big rally: The EUR was the complete reverse: AUD followed the two: Was mixed against EMs: Gold roared then slumped: Brent is weak given the soft USD: Not so base metals! Big miners are about to either break out or stick a big double top: EM
Via a roundly climate change skeptical Richo: Malcolm Turnbull is running out of options as to what issue he might choose to fight the next election. This week he threw away what seemed to me to be his best option. By far the biggest issue in Australian politics today is electricity prices. Neither the Coalition
Iron ore price charts for August 29, 2017: Tianjin benchmark was down 40 cents to $76.10. Paper burned overnight, especially for coking coal. Steel has not updated. Paper is clearly falling faster than physical so the latter obviously has ongoing tightness. That said, if coking coal capitulates as its supply disruptions pass then the iron
Break! XJO has just seen its symmetrical triangle break down the wrong way. It’s taken out the 200DMA to boot: This clearly opens the way for lower. Thanks DPRK! This should still lead absolutely nowhere in terms of North Asian conflict. Japan and US have requested a UN Security Council meeting. But we’ve yet to
Iron ore price charts for August 28, 2017: Tianjin benchmark fell only 20 cents to $76.30 after futures dropped much further. Paper firmed overnight. Steel is stalled. We definitely appear to be getting bogged down at these levels across the complex. Iron ore has recently reacted to the weak USD but not now. CISA output
I really can’t believe that this thing is going to go ahead, from Adani today: Adani Chairman, Gautam Adani, today gave the “green light” for the Carmichael mine and rail projects in Central Queensland. “I am proud to announce the project has Final Investment Decision (FID) approval which marks the official start of one of
Jonathon Tepper has a new name for the CBA: And investors are voting with their wallets, hitting new lows: The chart still suggests no support right down to $70 and with the politics getting worse who knows? The under-performance is worsening but the whole sector appears increasingly tarnished: Meanwhile today, Dalian has managed to ease
The new look US Department of Energy released a big report last week on the power industry. As a reminder this is the report commissioned by the new Secretary of Energy, Rick Perry, who seemed as if he had already written the conclusion that “coal was king” and was just looking for someone to come
DXY broke Friday night: EUR took off: AUD was up against the former but down against the latter: It was mixed against EMs: Gold edged into breakout but it was not convincing: Brent edged up too: Base metals flamed out, iron ore too: Big miners were mixed: EM stocks look set for a charge to
Tianjin benchmark was unchanged at $76.50. It feels toppy given paper has rallied more. The latter was slain Friday night. I couldn’t find any trigger so perhaps it’s just profit taking. The two coals are still very high. Chinese steel mill profitability is still insane despite the bulk rally. Port stocks fell another 1.75mt to
Via Macquarie: Non-major iron ore slips on Indian summer: Iron ore numbers reveal a marked slump in nonmajor, seaborne supply as India remains largely out of the seaborne market. Despite a sharp uptick in prices during July, Chinese imports from non-major supply, a very price elastic segment of the market, fell to 10.3 Mt,
Lot’s of good material today on Australia’s great energy debacle. First, Thomas Parry foundation chairman of the Australian Energy Market Operator 2008-2015 does a great job of describing the history: Why is electricity in Australia now so expensive when not that long ago it was cheap? Following the UK privatisation model, Victoria – under a Liberal government
Iron ore prices for August 24, 2017: Tianjin benchmark sank 90 cents to $76.50. Paper firmed overnight after a late sell-off yesterday. Coking coal is off to the races on more temporary supply issues in QLD and Chinese restocking. So long as it runs we can’t say iron ore is done. The main source of
Dalian is warming up again today: XJO is up too as its symmetrical triangle narrows: With Big Iron powering, it would seem that the odds favour an upside break from that pattern: Big Gas also appears constructive as it ravages east coast pensioners: And Big Gold looks positive too as it climbs: But holding it
Via Credit Suisse: Iron ore supply deficit to China continues – steel demand accelerated. It is probably fair to say that almost every commodity analyst looking at the seaborne iron ore market over the last few years has calculated that the iron ore market is in over-supply and getting worse. But we have all been
Iron ore price charts for August 23, 2017: Tianjin benchmark fell $1.40 to $77.40. Paper firmed overnight. Steel fell sharply. From Reuters: Steel and iron ore futures in China fell about 4 percent on Wednesday as a selloff in steel dragged down prices of the steelmaking raw material, cutting short a rally that lifted iron
by Chris Becker The always fun to read Tom Price from Morgan Stanley asks the question as commodities put in some great market performance as the USD (measured by the DXY dollar index) goes down the golden toilet: The technical reasons are all very similar, with copper here illustrative of a bullish rectangle pattern that
No Wall St rally for you! XJO is kidding: As Dalian crashes: Big Iron is off: Big Gas looks strong. If you don’t mind stealing from pensioners then the charts look constructive: Big Gold is firm too but I’m definitely a seller on the notion that Trump has bottomed: Big Bubble is getting hosed as
First, the “buy” from Deutsche: New strategy and targets should result in significant re-rate BHP has reported a strong FY17 result with close to record FCF of US$12.6b driving net debt down to US$16.3b. Earnings were below our estimate on higher net interest. A revamped strategy with measurable targets was outlined which we applaud. BHP
Macquarie’s excellent monthly steel mill sentiment survey leaves no room for doubt. Chinese steel is in a full blown boom: Sentiment among players in the steel and iron ore industries remains very bullish this month, particularly on the steel side. The market is holding a positive outlook on steel prices based on the expectation
Iron ore price charts for August 22, 2017: Tianjin benchmark rose 70 cents to $78.80. Coking coal futures are falling as the seaborne price is now more expensive than Chinese sourced. Futures were pounded overnight. Steel is near its highs. There’s a good chance we’re done here. Coking coal is unlikely to go higher and
DXY sank last night as debt ceiling worries mount: AUD was up against USD and EUR: But down against EMs as risk poured on: Gold firmed and is nudging break out: Brent was hosed: Base metals were mixed but the anti-USD play still looks strong: Big miners were firm: EM stocks too: High yield is
The RBA famously described the China mining boom as a three phase event: The mining boom can be viewed as a confluence of events that have boosted mineral commodity prices, mining investment and resources production. This combination of shocks has boosted the purchasing power and volume of Australian output. It has also led to large
Via Bell: Outstanding earnings growth FMG has reported an earnings result for FY17 that has come in below market consensus and our estimates, despite profit growth of 112% yoy to US$2.1 billion (US67cps or A85cps for current P/E ratio of 6.5x). The exception was the declaration of a A$0.25/sh final dividend, for a total FY17
