AUD: ‘Big 3’ iron ore production softer in Q1 - Westpac

Malika Hariharan, Research Analyst at Westpac, notes that the cumulative output of the 3 major Australian iron ore producers at 184.8 million tonnes shows a considerable drop of 6mt q/q but the seasonality of Q1 production leaves us unconcerned.

Key Quotes

“The Australian regional cyclone season (Nov-Apr) means a soft March print is common. More comparable is the rise of 12mt from Q1 2015. While Q1 16 production was strong for all the three, technical issues have forced Rio Tinto to cut its iron ore production guidance for 2017 while BHP Billiton cites adverse weather as the reason for its reduction.

FMG maintained its forecasts while adding upside potential. The higher price has encouraged some smaller producers to return to the market, meaning Australian production cuts are off set. This risk of rising volumes should provide some resistance to the rising iron ore price.”

Longs are building in AUD, CAD, NZD and JPY - SocGen

Kit Juckes, Research Analyst at Societe Generale, notes that the CFTC data paint a now-familiar picture of speculative FX positioning: Longs are building in AUD, CAD, NZD and JPY.
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JPY: Further weakness coming in the few weeks - SocGen

Kit Juckes, Research Analyst at Societe Generale, notes that the merest whisper of further BOJ action at Thursday’s meeting was enough to scare some of the yen longs (and revive interest in the Nikkei).
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