What a difference a week makes! This time last week I was reporting how stable the markets were, however the last few days have seen turbulent markets on metals and our exchange rate. Most notably on Friday when we saw the copper price fall AUD 370 in one day. When talking to some of the international traders particularly in recent months, many of them are saying “it’s very difficult to quote prices when the market is so unstable”. I find this a funny comment as the markets are really NEVER stable. In some respects, these fluctuations can be a little frustrating, however I also think it’s fair to say that the same fundamentals are what make metal recycling and trading such a unique and interesting business to be involved in.
Please find the following light hearted article explaining the volatility of copper in the past week and another regarding the AUD exchange rate;
Copper Volatility Through The Roof
By Matt Day @ dowjones.com
2:44 (Dow Jones) Investors look to Dr. Copper, the metal with a PhD in economics for its role as a bellwether, for a reading on the health of the economy. The doctor has offered a decidedly mixed prognosis recently. Comex Copper futures have swung from 15-month lows to a one-month high in the span of four days. Prices moved by more than 3% during each of those sessions, a streak not seen since January 2009. Futures today rise 7% as a preliminary gauge of Chinese manufacturing in October shows expansion for the first time since June. Dec futures settle at $3.449/lb, a one-month high.
Aussie, dollar climbs to 5-wk peak on China relief By Wayne Cole of Reuters
The Australian and New Zealand dollars swung higher on Monday as upbeat data from top trade partner China countered concerns about a hard landing there, though investors remained wary in case of disappointment from European debt talks. Australian data also showed producer prices rose by less than expected last quarter, whetting appetites for the key consumer price report on Wednesday where a benign reading on inflation could open the door for a cut in interest rates. The Aussie dollar stood at $1.0400 in late trade, having hit a peak of $1.0419 from $1.0331 in New York on Friday when it had already climbed a full cent. That left it near its highest in five weeks and within striking distance of major chart resistance at $1.0440.
The Aussie perked up when HSBC reported its early index of manufacturing had risen to 51.1. in October, up from 49.9 in September and the highest since May. The improvement suggested Chinese domestic demand was proving resilient to troubles in Europe, a boon for Australia as the Asian giant is its single biggest export market.