This mornings’ soft start for the Australia 200 has unwound  yesterday’s outperformance as investors await further developments including Theresa May’s Brexit speech and Donald Trump’s inauguration.

The material sector led the ASX 200 index higher yesterday but overnight action in metals markets were mixed creating some question about upside momentum today. The spot iron ore price had yet another good day but other base metal prices were weaker in response to the market’s overall guarded tone in a week of political uncertainty.

Rio Tinto has produced another solid production report, containing little to concern investors or change the market outlook. Differences with guidance and overall market expectations were minor.  Overall, the company is now well placed to withstand any down in metals prices with a strong balance sheet and prospects of further gains in productivity. If iron ore prices do hold up longer than anticipated, markets may begin to anticipate the possibility of capital management.