Last April, when the price of Iron
Ore was at its lowest, we asked “Is
Iron Ore the deal of a lifetime opportunity?” The price was then below $40
per tonne. We wondered if it might not be to the advantage of someone with
sufficient financial muscle to start taking up positions in Iron Ore futures,
with a view to capitalising on a rise in the price of the commodity.
That rise has now taken place, and in
double quick time. The reasons given are a reduction in Chinese stockpiles, further
economic stimulus by the Chinese government and the exit of a number of
second-tier producers from the industry.
Price now stands at close to $65. The
chart of Iron Ore prices, above, can be subjected to Technical Analysis, just
as can the charts of your favourite equity or currency pair. It shows a very
clear indication that something north of $60, even approaching $65, could well become
the benchmark for Iron Ore for the foreseeable future.
Blizzard
of comment might mean a Greek breakthrough
Yesterday saw comments from Greek
government officials that tried to give the impression that a deal with the EU
and the IMF was almost in the bag. The Greek Prime Minister, Alexis Tsipras,
made a speech in which he said that an agreement would be finalised by this coming
Sunday. On the other side the ECB piled on the pressure by warning all
concerned that further prolongation of the Greek negotiations could make it difficult
for some other EU member states, which are not yet fully out of the woods, to
borrow in the bond markets. Ewald Nowotny, Austrian central bank governor and a
member of the ECB governing council, said that Greece cannot receive interim
funding under current rules, which is widely interpreted as meaning that there
will be no “kicking the can down the road” this time round.
And Christine Lagarde, head of the
IMF, was quoted by Frankfurter Allgemeine Zeitung yesterday as saying that,
while Greek exit from the Eurozone was “a potential”, it would not signify an
end to the Euro.
We wonder does all this activity and commentary
a signal that, at long last, we have truly reached a make or break situation in
relation to the Greek question. Or have we heard that before?
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