Good afternoon
Trump has had two halfway reasonable guys in his team - Tillerson and Cohn - one is now gone. Very bad news - Nero is continuing to run the show on his own! This cannot be good for the confidence , which any economy needs! Cohn´s retreat certainly raises the risk of Nero doing more stupid things!
The good news is certainly on North Korea...those two countries seem to manage their future themselves, without the US, who are lightyears behind the curve here.
Strong labor numbers by ADP in the States, and Unit Labor Costs rose by 2.5% - both numbers we probably do not like in the current enviroment.
Metals are giving up today, what they made yesterday amid persistent fears after Cohn´s departure, that a Trade War might be upon us.
Macquarie is cautious on short term nickel prices, as Chinese producers of high-quality stainless steel have announced some production closures, amid negative margins. Also, Indonesian stainless steel production from NPI is growing strongly. For the year 2018 however, Macquarie sees another year of close to 100.000t gap between supply and demand - hence another reduction in nickel stocks this year.
Freeport and Codelco, two of the largest copper producers worldwide, see excellent conditions for a strong copper market in coming years, as supply is restrained by limited capex in new mines.
Metro Mining - the big line which was overhanging from a fund-wind up of 56 mill shares has finally been done today at 28ct - nice price for some insto´s to get in tehre! To buy this thing, which according to their feasibility study has a NPV10 of 600 mill A$ at a little more half that valuation, is a great entry! And with production to start next month, the discount rate should also move from 10- to 8% at least. China´s bauxite imports are seen to more or less double over the next 8-10 years, and these guys own a mine close to China. There are sexier things in town - but in terms of risk-reward, Metro is very cheap indeed!
Have a nice evening
WS