World iron ore prices jumped to a new three-month high overnight as data emerged that export of the mineral to China hit a record in May.
The spot price for ore delivered in northern China jumped 2.3% to $US64.77 a tonne. That’s the highest price since mid February and means the price is up more than 38% from 10 year low of $US47.08 on April 2.
Despite that good news, the local market will start lower for yet another day with a fall of 13 points pencilled in for the ASX 200, according to the overnight futures market.
The Aussie dollar is trading under 77 US cents this morning at about US76.85, having lost all the ground made in the wake of Tuesday’s non-decision from the Reserve Bank and the stronger than expected GDP figures for the March quarter.
Yesterday’s weak retail sales and trade days certainly scared local investors and they will now be on tenterhooks for the next few days, especially over the long weekend.
The rise in the price of iron ore came despite more turmoil on global financial markets that saw oil and gold prices drop noticeably as investors piled into US dollars and away from the volatility in bond markets.
Yields on sovereign bonds surged, then retreated overnight on conflicting news from China (more volatility there as a broking house stopped margin call investing), German bond yields soared, then retreated, and the same happened to the yield on the key US 10 year bond which topped 2.40% overnight before falling back to closer down on the day before at 2.31%. German 10-year bund yields jumped to 0.99% at one stage before dipping lower on the day to end at 0.84%.
That instability knocked Wall Street sharply lower as the US dollar rose ahead of tonight’s jobs report in the US and the bi-annual OPEC meeting in Vienna. News that as expected, Greece won’t make a scheduled payment to the IMF tonight, but will bundle it up with three others others and deliver the money at the end of June, also worried markets
The S&P 500 dropped 18.23 points, or 0.9%, to close at 2,095.84, the Dow shed 170.69 points, or 0.9%, to end at 17,905.58 and the Nasdaq Composite slumped 40.11 points, or 0.8%, to close at 5,059.12.
Meanwhile data from Port Hedland yesterday showed that in the first five months of 2015, exports through Port Hedland totaled 182.4 million tonnes, 13% more than a year ago, as cargoes to China rose 18% to 153.5 million tonne, the data showed. This month’s record topped the previous high, set in October. Exports to China were the highest this year.
