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20 Mar 2013
Forex Flash: Two notable developments among the Antipodeans - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that there are two notable developments among the Antipodeans.
Firstly, they note the forecast for iron ore prices. They write, “One major investment house cut its forecast to $139 a ton from $144 average for this year. The main considerations were moderating demand in the face of softer steel production in China. In contrast, the Australian government raised its forecast to $119 from $106 a ton forecast last December. Separately, Australia reported a 1% decline in merchandise imports. We suspect that poor weather and the Chinese New Year distortions have skewed the data.”
Secondly, they see that New Zealand reported another sharp jump in milk prices. The 14.8% rise at the fortnightly auction follows a 10.4% rise at the previous auction. The key whole milk powder jumped 21%. However, they feel that the rising price is largely due to the drought-induced scarcity. They write, “Volumes fell by 28%. New Zealand reports Q4 2012 GDP early in Wellington on Thursday. After today's somewhat wider than expected Q4 current account deficit, the risk is slightly to the downside of the 0.9% consensus forecast.”
Firstly, they note the forecast for iron ore prices. They write, “One major investment house cut its forecast to $139 a ton from $144 average for this year. The main considerations were moderating demand in the face of softer steel production in China. In contrast, the Australian government raised its forecast to $119 from $106 a ton forecast last December. Separately, Australia reported a 1% decline in merchandise imports. We suspect that poor weather and the Chinese New Year distortions have skewed the data.”
Secondly, they see that New Zealand reported another sharp jump in milk prices. The 14.8% rise at the fortnightly auction follows a 10.4% rise at the previous auction. The key whole milk powder jumped 21%. However, they feel that the rising price is largely due to the drought-induced scarcity. They write, “Volumes fell by 28%. New Zealand reports Q4 2012 GDP early in Wellington on Thursday. After today's somewhat wider than expected Q4 current account deficit, the risk is slightly to the downside of the 0.9% consensus forecast.”