USA, PMI, Yields & Construction

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:

  • The USA Federal Reserve Chairman has not indicated any more central bank support, and has not reversed the prevailing USA central bank settings.  
    • Bond yields have lifted upon interpretation of his speech as a signal that the USA central bank may have reached some limits of monetary policy expansion, resulting in a selloff of bonds. 
    • The Chairman said the banks is monitoring financial conditions, and that the USA economy is a long way from recovery..  His view is that prices will rise but any increase in inflation will be transitory, and does not expect inflation to exceed 2%.
  • Increased oil prices also contributed to bond market nerves, worrying some about prospect of inflation (which is usually not good for bonds).
  • USA PMI indicates a strong outlook. USA bond yields starting to lift. 
  • Overall, while still jittery and volatile, the global economy continues to recover.   
  • A number of sound base metals projects are being advanced through evaluation toward production, as their respective markets continue to tighten.

SUMMARY  

*Copper  May be some weakness ahead, though economies outside China are recovering. 

Cobalt  Co price holding ground amid others’ declines.  

*Nickel  Tesla to take stake in Goro mine with Trafigura.  Tesla needs security of Ni supply. 

Zinc & Lead  China’s Zn production to increase in 2021.  TC’s for Zn & Pb concs are stable..  

*Tin  Boom in demand for electronic products.      

Aluminium  China-Inner Mongolia to cap aluminium production.

Gold  Fitch forecasts avg 2021 Au price higher than current spot price.  

*Platinum & Palladium  Palladium price forecast to hit all-time highs in 2021.  (CHN, IPT)

*Oil  OPEC+ extends production cuts by a month, into April.  LVPCI / SHCC to be revised / to come.  

Coal  HCC Dec20Qtr contract price established.  

Iron Ore  Australia reports record iron ore shipments. 

Shipping  Panamax rates fell this week while Capes and Supramax rates increased.

General 

*USA Treasury Yields:  Yields lifting – USA Fed Chair indicates limits of monetary policy expansion.

USA PMI:  Strong outlook as key first four segments have positive growth and are .50.

USA Construction Spending:  Broadly positive growth.