Watch Miners as Iron Ore Slides on China Demand, Output Curbs; Asia Stocks Steady, U.S. Futures Slip; Yields Rise,

07/06/2021 China’s iron ore imports in May tumbled to their lowest level in a year as record prices deterred buyers of industrial commodities and the economic recovery from the pandemic begins to slow. Copper purchases in May also fell to a three-month low, while shipments of copper ore edged higher on the month, according to Chinese customs data released earlier this morning.
Asian stocks are steady this morning, with U.S. equity futures edging lower as traders weighed Janet Yellen’s comments on higher interest rates and awaited this week’s U.S. inflation report. Shares fluctuated in Japan and dipped in Hong Kong, while S&P 500 and European contracts were in the red. Treasury Secretary Yellen said President Joe Biden should push forward with his spending plans even if they spark inflation that persists into next year, adding a “slightly higher” interest rate environment would be a “plus.” Benchmark 10-year U.S. Treasury yields and the dollar ticked up. Investors continue to assess whether price pressures will lead central banks to pare stimulus earlier than expected. The S&P 500 rose toward a record Friday on a jobs report that showed a pickup in hiring but fell short of estimates, suggesting scope for ongoing policy support. Trade data from China showed exports continued to surge in May, although at a slower pace than the previous month, fueled by strong global demand. Oil in New York touched $70 a barrel for the first time since October 2018 before falling back. Bitcoin traded around $37,000 after declining over the weekend amid a cryptocurrency crackdown in China. Tencent is trading down 1.7% in HK.
The JSE Top 40 futures are indicating lower start, down 490 points or 0.80%, with the Rand steady around the 13.44 level vs the USD.
Here are key events to watch this week:

  • Apple holds its annual Worldwide Developers Conference (WWDC) virtually for a second year, to announce new hardware and software and work with developers. Through June 11.
  • European Central Bank decision on Thursday and press conference with President Christine Lagarde.
  • Iran nuclear deal talks reconvene in Vienna Thursday.
  • U.S. consumer price index on Thursday.
  • Group of Seven leaders’ summit starts in Cornwall, England Friday.
    The FTSE/JSE Africa All-Share Index closed up 0.08% to 67,825 on Friday. It was a mixed market with platinum counters recovering slightly after big falls the previous session. Heavyweights Naspers and Prosus also closed positive with banks and gold counters ending the day in negative territory. The Rand strengthened to around 13.43 per US$.
    EU/UK
    European stocks closed higher on Friday as investors digested a key U.S. jobs report. The pan-European Stoxx 600 index finished the final trading session of the week up about 0.4%, with most major bourses and sectors pushing into positive territory. Traders, weighing up the link between inflation pressures and the reopening of U.S. businesses, were focused on the U.S. jobs report Friday. Job creation disappointed again in May, with nonfarm payrolls up by what normally would be considered a solid 559,000, but still short of lofty expectations. Back in Europe, shares of some airlines sank Friday after the U.K. removed Portugal from its so-called “green list” of travel destinations. British Airways owner IAG fell 0.9% while Wizz Air was down 3.3%.
    US
    U.S. stocks climbed on Friday as the key May jobs report showed solid gains, boosting confidence in the economic comeback. The S&P 500 rose about 0.9% to 4,229, sitting less than 0.2% from its all-time high reached last month. The Dow Jones Industrial Average gained 179 points to 34,756. The Nasdaq Composite outperformed with a nearly 1.5% rally to 13,814. The major averages all registered modest gains for the week. The blue-chip Dow and the S&P 500 advanced about 0.7% and 0.6%, respectively, on the week for their second straight positive week. The tech-heavy Nasdaq gained just shy of 0.5% this week for its third winning week in a row. The U.S. economy added 559,000 jobs in May, the Labor Department said on Friday. The number came in slightly lower than an estimate of 671,000 from economists surveyed by Dow Jones, but still showed a healthy rebound in the labor market. It’s an improvement from the upwardly revised 278,000 payrolls added in April. The unemployment rate fell to 5.8% from 6.1%, which was better than the estimate of 5.9%. Meme stocks continued their wild prices swings on Friday, but this time to the downside. AMC Entertainment ended the session down about 6.7%, but still gained more than 80% this week. BlackBerry fell 12.7% Friday, paring its rally this week to 37%.
    ASIA
    Shares in Asia-Pacific were mixed in Monday trade as investors reacted to Chinese trade data for May. Mainland Chinese stocks were lower by Monday afternoon, with the Shanghai composite declining 0.21% while the Shenzhen component slipped 0.67%. Hong Kong’s Hang Seng index fell 0.77%. China’s exports in dollar terms rose 27.9% in May as compared with a year earlier, according to customs data released Monday. That was lower than forecasts by analysts in a Reuters poll for a 32.1% year-on-year jump in exports. Meanwhile, the Nikkei 225 in Japan gained 0.45% and the Topix index rose 0.19%. South Korea’s Kospi advanced 0.3%. In Australia, the S&P/ASX 200 shed 0.11%. MSCI’s broadest index of Asia-Pacific stocks outside Japan traded 0.18% lower.
    COMMODITIES
    Gold held a gain after U.S. jobs data missed expectations, easing concern that a strong economic rebound would stoke inflation and see a potential dial back in stimulus. Bullion ticked lower after rising 1.1% on Friday. Spot gold slipped 0.2% to $1,887 an ounce at 11:56 a.m. in Singapore. Prices climbed to $1,916 last week, the highest intraday level since Jan. 8. Silver and palladium fell, while platinum rose.
    Oil slipped after hitting $70 a barrel for the first time since October 2018 as a rally driven by signs of a tightening market stalled. Futures fell 0.3% in New York after rising as much as 0.6% earlier following a second straight weekly gain.
    Copper fell with other base metals in a risk-off day as investors mulled the monetary-policy outlook ahead of inflation reports in the U.S. and China due later this week. Copper was down 0.5% at $9,909 a ton by 12:25 p.m. Shanghai
    time, while nickel, zinc and aluminum also fell. China trade data released Monday showed a mixed picture for copper imports, with May’s inbound shipments of unwrought copper and products sliding to a three-month low. Imports of concentrate rose from a month earlier.
    China’s iron ore imports in May also tumbled to their lowest level in a year as record prices deterred buyers of industrial commodities and the economic recovery from the pandemic begins to slow. Iron ore futures in Singapore slumped 3% to $192.90 a ton.