Melting Iron Ore Pressures RBA as April Rate Cut Now in Play
(Bloomberg) -- Australia's central bank is under intensifying pressure to cut interest rates next week as iron ore, the nation's biggest export, plunges to a decade low.
Traders' bets that the Reserve Bank of Australia will lower its cash rate by a quarter percentage point to a new record low of 2 percent have doubled to an 80 percent chance from 40 percent two weeks ago, swaps data compiled by Bloomberg show. Iron ore, which fell 47 percent last year, is headed for the biggest quarterly loss since at least 2009 as surging low-cost supplies swamp the global market while growth in demand from China slows.
A third of Australia's exports, or about 6 percent of gross domestic product, goes to China, and the majority of those shipments are iron ore. Kieran Davies of Barclays Bank plc estimates the fall in commodity prices means Australia's real exchange rate was 4 percent overvalued this quarter, prompting him to bring forward his rate-cut forecast to April from May.
Oil extends losses as deadline for Iran nuclear deal looms
(Reuters) - Oil futures extended losses on Tuesday, as Iran and six world powers ramped up the pace of negotiations to reach a preliminary deal that could ease sanctions and allow more Iranian crude onto world markets.
With a deadline less than 24 hours away, United States, Britain, France, Germany, Russia and China were trying to break an impasse in negotiations aimed at stopping Iran from having the capacity to develop a nuclear bomb, in exchange for an easing of international sanctions.
Officials said talks on a framework accord, which is intended as a prelude to a comprehensive agreement by the end of June, could yet fall apart over disagreements on enrichment research and the pace of lifting sanctions.
Major European share indexes on track for best quarter in years
LONDON, March 31 (Reuters) - European shares extended gains on Tuesday and headed for their best quarterly performance in several years, with Kingfisher leading the market higher after announcing it planned to sell about 60 B&Q stores in Britain.
Shares in Europe's biggest home-improvement retailer were up nearly 5 percent after it said it would close the stores, part of new Chief Executive Veronique Laury's plan to shake up the group.
"The new Chief Executive's transformation plan sounds promising, and these results underline why it is necessary. The reaction to the company's ambitious plans has been positive in early trade and adds to the company's recent share price rise," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.