This time last week we were commenting about the AUD/USD trading at the time at an 8 month high of 75.10 cents. To everyone’s surprise the momentum continued with the dollar climbing to over 76.5 cents on Friday to settle at today’s rate of 75.80.
On the weekend I read an article from Alan Kohler where he argued that China wont crash and that the relatively unknown “One Belt, One Road” policy of President Xi Jinping will underwrite the nation’s economy. The “One Belt, One Road” policy is a USD1 Trillion infrastructure program to introduce two schemes : the land-based Silk Road Economic Belt and the ocean going Maritime Silk Road. Both schemes should involve colossal volumes of steel, which will benefit us all.
Elsewhere on the LME, the markets have been relatively steady with the biggest movement in Aluminium dropping 3% in USD in the last week.
This weeks articles
**Aluminum Bulls Spooked by China as Open Interest Hits 8-Year Low**
By Agnieszka de Sousa
Bulls are fleeing the aluminum market.
Traders are holding the fewest bets on aluminum prices in more than eight years on the London Metal Exchange. A 7 percent slump in open interest last week coincided with the largest drop in prices in four months. That combination typically signals the closing out of bullish wagers.
JPMorgan Chase & Co. is recommending investors sell aluminum because smelters in China, the biggest producer, may resume production after cutbacks. Global inventories of the metal total a record high of more than 15 million metric tons, according to Macquarie Group Ltd. China Hongqiao Group Ltd., the world’s largest producer, plans to boost capacity by 16 percent this year, its chief executive officer said last week.