USA – Japan

Comments of particular interest are noted with ‘*’.  

Matau’s Comments:  

  • Key drivers for 2020 are likely to be the same ones as for 2019:   outlook for growth in developing economies and sustained health of advanced ones, set against potential supply disruptions and other geopolitical risks.  Overlying these the coronavirus – covid-10 outbreak which has created a new level of uncertainty. 
  • From a marketplace perspective covid-10, or coronavirus, situation is still very fluid regarding the economic impact on major world economies.  Traders and investors are vacillating daily on whether the outbreak’s rate of spread is accelerating or declining.  This uncertainty will continue to support buying interest in safe-haven assets, the likes of gold, USA Treasuries and the USD, and the movement of money out of riskier assets like equities.  Manufacturing indexes from the major world economies are starting to show the negative effects of the covid-19 outbreak.    
  • Interestingly the Baltic shipping indices have turned upward indicating that demand for bulk shipping has bottomed and is improving.  Iron ore prices have also improved this week. 
  • Base metal markets remain fundamentally tight, and are incrementally continuing to tighten.   Watch for supply disruption(s).  In 2020 there are numerous key labour negotiations at operations in Chile.  Supply disruptions such as these, in absence of dramatic (geopolitical) drivers are likely to drive price responses. 


Copper  Fears of coronavirus spread is hampering economic growth, in China and elsewhere.  

Cobalt  Miners need to get skates on to feed forecast Co demand growth.  

Nickel  Ni weights per EV differ by country, reflecting demand style.  

Zinc & Lead  Pb & Zn TC/RCs are expected to rise.  Return of the escalators.  

Tin  Tanzania is now ‘certified’ to export Sn, Ta & W.  

Aluminium  Supply (smelters) and demand have different abilities to adjust to market changes.

Gold  Driven by fear and greed.  G20 meets.  Chinese tourism halted, likely a significant economic impact around the world.  

Platinum & Palladium  Pt market was in deficit in 2019,  Expect Pt to return to surplus in 2020.

Oil  OPEC+ is not moving its March meeting forward.  Russia has no intention of cutting output. 

Coal  Chinese coal industry increased capacity this week but transport limitations remain a challenge.  

Iron Ore  There appears to be a disconnect between the Chinese steel market and price of iron ore.  

Shipping  Shipping indices and rates picked up this week reflecting increased demand for shipping.  


USA Treasury – Yields:  as of this week USA yields are inverted.  

Japan – Orders to Machinery:  Mostly segments have negative growth.  

USA – New Housing Starts:  Strong positive growth.  Appears the traditional link to (leading changes in) IP is absent. 

USA Industrial Production & Capacity Utilisation:  Ongoing negative IP growth and low Manufacturing Utilisation.