In a further
blow to the inflation-growing aspirations of central banks around the globe,
the price of commodities continues to fall precipitately. Oil, in particular,
had another very bad day yesterday on the back of news out of the Middle East that
OPEC members had failed to agree on production cuts that might tend to place a
floor under the price.
Saudi Arabia
seems to be determined in its drive to place as much pressure as possible on shale
producers in the U.S, by using its economic muscle to attempt to make it
uneconomic for what they see as relative newcomers to the market place. This is
causing so much aggravation among its members that we are now seeing headlines
to the effect that the OPEC cartel has effectively ceased to exist as a potent
force.
Meantime
that old stalwart of the Australian economy, Iron Ore, is following oil into
the lower reaches of the price charts. Energy is such a large part of the
production cost of the raw material for steel that this is almost inevitable.
It does, however, place higher cost miners, those outside of the group that is
made up of the three majors: BHP Billiton and Rio Tinto of Australia, and Vale
of Brazil, under the kind of pressure that threatens their very existence.
Eurozone GDP today
All
concerned parties will be keeping a close eye on Eurozone Gross Domestic
Product figures, which come out this morning at 09:00 GMT. Last month, figures
for the third quarter showed growth across all the countries that use the Euro
to be only 0.3%, down from 0.4% on the previous period and also lower than expected.
Any news on
this front later this morning that does not show new growth will only serve to
place further downward pressure on the Single Currency.
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