Global markets were mainly closed overnight due to a Bank holiday in Britain and the US and with a two-day holiday in China. Closer to home, local markets were quiet, with both the ASX & NZX selling off yesterday.
The price of iron ore has fallen sharply in recent times, and there has been no relief as Australia’s largest export continues its wild ride. Investor sentiment on iron ore has turned decidedly negative after what had been a stellar run since mid-2016. Weakness in the price of iron ore has been one factor contributing to the fall in the Aussie dollar in recent months.
We had warned that moves in the iron ore sector had come too far, too fast, and prices appeared stretched to us in November 2016. While we are not surprised by a retracement, we did not expect the speed and dramatic fashion in which it has reversed course.
Iron Ore Price
The fall has been driven by the resurfacing of concerns that demand will slow,...
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