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Markets march on as BHP sets records

Tesla, man and machine

The world’s largest listed mining company, BHP, this morning revealed record levels of half-year iron ore production as prices soared. This led the board to declare BHP’s highest ever interim dividend at US $1.01 per share. The stronger report against a backdrop of growth positive moves overnight should see a constructive start to Asia Pacific trading today.

Crude oil prices rose another 2% overnight, and copper and iron ore lifted again, illustrating ongoing expectations of economic recovery. The US dollar, Japanese yen and gold prices held steady, indicating little interest in safer havens.

Volatility makes some investors nervous, but is the traders’ friend. Higher volatility offers greater trading opportunity, albeit at greater risk. At the moment, traders are torn between two main opportunities. Volatility is highest in crypto currencies, and individual stocks as they report on the quarter, half or full year just past. Both paused overnight, as Bitcoin consolidated just below US $50,000, and there was a rare gap in the US company reporting season.

Australian investors are looking at a very busy week as around one third of the top companies showcase their earnings. In addition to BHP, Sims Metal, salmon farmer Tassal Group, appliance maker Breville, online housing advertiser Domain and medical supplier Ansell have all delivered above Bloomberg consensus estimates this morning. Brambles, ARB Corp and GWA are also due to report today.

The People’s Bank of China will decide one year lending rates today. Any increase could solidify expectations of monetary tightening although analysts rate this a small chance. The Reserve Bank of Australia will release the minutes from its February meeting, with doves looking for further discussion of negative interest rates and hawks seeking evidence of tapering talk.

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