It’s been another nasty fall in commodity prices overnight with oil prices in particular grabbing the headlines with gems like “Crude Awakening”, “Oil Slump”, and “Oil Dip”. Added to this there is heightened paranoia over the Chinese governments clamp-down on short-selling in Shanghai and HK exchanges.
Copper and Aluminum which had a few days of rises last week are now back at 7 year lows with expected falls on the horizon. News last week out of China that the grouping of 10 of China’s top copper smelters would reduce output by 350,000 tonnes, 10 major zinc producers would cut their output by 500,000 tonnes and eight of the biggest nickel producers would cut production by 80,000 tonnes was greeted with a dose of skepticism. Analysts have pointed to a long history of failed promises from Chinese metal industries on production cuts as rival companies wait until their competitors make the first move and established firms get angry that the newcomers get to stay in business.
The AUD/USD is currently trading at 72.62 down from yesterday’s high at 73.4