Commodities get slammed, Euro-area PMIs beat and the Kirchner era ends in Argentina. Here are some of the things people in markets are talking about today.
Copper dropped below $4,500 a metric ton for the first time since 2009, declining as much as 3 percent in Shanghai before recovering somewhat to trade down 2.5 percent at $4,468 by 10:45 a.m. London time. Nickel dropped to a new 12-year low. Zinc, which staged a rally on Friday following the announcement of cutbacks in Chinese smelting, suffered a reversal and dropped 4.3 percent. Zinc imports to China have jumped to highest since January 2014 as traders sought to take advantage of an arbitrage opportunity in London pricing.
Economic activity in the Euro-area hit the highest level since May 2011 in October according to a composite index of services and manufacturing by London-based Markit Economics which rose to 54.4 from 53.9. In Germany, both services and manufacturing PMIs increased, well ahead of economist expectations for a slight decline in those readings. These strong readings may lead to division at the European Central Bank which is expected to announce further easing at next week’s policy meeting.
There still seems to be no light at the end of the tunnel for oil bulls who see little hope of supply cuts at next week’s OPEC meeting in Vienna. Continued low oil prices are starting to hurt in Saudi Arabia, where pressure is now building for the Gulf kingdom to drop its currency peg to the dollar rather than impose more budget cuts. One state that has managed to do well in 2015 is Mexico which hedged its oil sales at $76.40 for 2015, meaning it is due a payment of at least $6 billion next month.
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