The price of iron ore hits a 2020 high: ASX set to open higher


Following small gains from US markets overnight, the Australian share market looks set to open higher this morning. The US is seeing some fluctuation in the markets as investors weigh up the economic recovery from the pandemic. They US recorded another record single day spike in new cases, threatening their economy. Back home Victorian farmers are struggling to place their products as many Melbourne restaurants return to lockdown. On the commodities front, iron ore saw a sharp rise in price.

Local economic news

Lending Indicators, May 2020.

Markets

Wall Street closed higher yesterday: The Dow Jones Industrial Average gained 0.7 per cent to 26,067, the S&P 500 added 0.8 per cent to 3170 and the NASDAQ closed 1.4 per cent higher at 10,493.

European markets closed lower, London’s FTSE fell 0.6 per cent, Paris lost 1.2 per cent and Frankfurt closed almost 1per cent lower.

Asian markets closed mixed, Tokyo’s Nikkei fell 0.8 per cent, Hong Kong’s Hang Seng added 0.6 and China’s Shanghai Composite closed 1.7 per cent higher.

Taking all of this into equation, the SPI futures are pointing to a 0.9 per cent gain.

Yesterday, the Australian share market closed 1.5 per cent lower at 5920.

Company news

Meridian Energy (ASX:MEZ) has confirmed that Rio Tinto, global mining giant and owner of the Tiwai Point Aluminium Smelter, has given notice this morning that it will be terminating the contract relating to the Smelter with effect on and from 31 August 2021. Rio Tinto have indicated that at this date the wind-down of operations is expected to complete and the smelter will eventually close. Meridian is reviewing this decision and will engage with Rio Tinto to assist the smelter owners in an orderly exit from New Zealand. Shares in Meridian Energy (ASX:MEZ) closed 1.03 per cent higher at $4.90 yesterday.

Currencies

One Australian Dollar at 7:55 AM was buying 69.83 US cents, 55.37 Pence Sterling, 74.94 Yen and 61.64 Euro cents.

Commodities

Iron Ore gained 3.4 per cent to $106.50.
Iron Ore futures suggest a 1.98 per cent gain.
Gold has gained $10.70 to US$1821 an ounce.
Silver was up 46 cents to US$19.16 an ounce.
Oil has added $0.28 to US$40.90 a barrel.