Recapping a couple macro themes from today that are part of larger macro views we have.
The Aussie dollar is off 1.4% over the last 2 days and through key support at 101.80. We have been talking this trade for a few weeks now and from April 11th (eve of the Gold plunge) now -3.5%.
Iron ore exports from Brazil and Australia fell 28% and 8% respectively in November. Spot prices are at a six week low and pressured to shrink for the rest of the year thanks to flaccid Chinese demand.
Iron Ore (IO) has run from $86 per ton to $122 per ton with expectations that prices will hold at this elevated level. According senior resource analyst at Mine Life Pty in Sydney, Gavin Wendt told Bloomberg Network “Prices will stay about where they are now until 2013,”
Before Friday’s pullback emerging markets were at their highest levels since May of this year compared to domestic markets. Emerging markets have been riding a slow but steady reversal of the summer move lower.