Yields – USA
Comments of particular interest are noted with ‘*’.
- USA Yield curves are an odd shape in the current form, with a huge sag in the middle. A review of current and pre-GFC curves shows some differences. Some commentators consider the current duration has not been long enough. Others comment on the ‘shape’ of the curves. Opinions are invited.
- Base metal inventories continue to remain tight. Most prices are in the ‘nose of pinch-point graphs. Pinchpoint positions are mostly less than 1 week’s consumption. More media commentary is recognising this condition. However sentiment (geopolitical) continues to drive prices over fundamentals.
- The USA Fed met last week and cut rates a bit. Trump took umbrage and announced further “taxes” (tariffs) on Chinese imports. The markets took this hard, as a further level of uncertainty and volatility, and parts of the market appear to have capitulated. Base metals’ contangos is one example.
*Copper The size of the world copper market has been progressively underestimated.
*Cobalt Indian JV Co formed to seek sources of Li, Co, et al. Volvo cars with recycled Co produced.
*Nickel BHP Group plans to start production of nickel sulphate in the Jun20Qtr.
Zinc & Lead ZMI’s Kildare Zn project. Pb supply improving (for now).
Tin China switched to being a net exporter of refined tin last year.
*Aluminium: quote: “Trump’s trade war with China is backfiring and impacting the US economy”.
Gold Central Banks adding to holdings. Trump vows more tariffs on China. Global uncertainty increases.
Platinum & Palladium WPIC upbeat on surge in Pt EFT holdings.
*Oil USA share of growth is strong, with light crude; heavier Iranian and Venezuelan output is down..
Coal China again planning to limit imports, after a strong start to the year.
Iron Ore China prices fell as Brazilian exports picked up, on Vale restarts.
Shipping Freight rates slowed from a peak earlier in July.
*USA – Yield Curves: an examination of the current and an earlier period. A signal not a cause.
USA – PMI: Still positive, though still slower outlook.
*USA – Construction Spending: -ve growth for Total and Private & Residential spends.
Japan – Industrial Production: slow down for IP and several segments.