Market Update

General - Oceana

Good afternoon

the German car industry received a nice 1-2 punch within 24 hours: The German Mininster of Traffic forbids the registration of all Porsche Cayenne models, using a 3ltr Audi engine, for software cheating. A German court indirectly imposes a ban of all diesel-engined cars in the town of Stuttgart from 1.1.2018 - hometown to Daimler and Porsche. I guess there might be an appeal possible.

The Trump administration slaughtering each other - terrier Scramucci is indirectly accusing Reince Priebus to be the "leak". the terrier calls him a "f......g paranoid schizophrenic". Nice administration!! About Steve Bannon: "I am not trying to suck my own d..k"! Unbelievable, that guy....Next thing, might be, that he is trying to grab Trumps p...y??? This is a new low-point in American culture.....( if that ever existed)

Vale is the next large iron ore producer cutting it´s guidance by a few million t....And Glencore paying top-$ for a stake in ex-RIO´s Hunter Valley thermal coal mines. GLEN are obviously very smart - big expression of confidence in thermal coal! So the good news for bulk-producers continues...

Citi is citing a very positive update from CAT ( and Komatsu today with equally good numbers ), strong order-intake from infrastructure contractors in China, and a 10% increase in whitegood sales as being a very positive indicator for this half´s growth in China.

Spanish + Swedish economy growing very strongly, while German CPI much stronger than expected ( 1,7% vs 1.5% expected ). GDP first estimate for the US is +2.6%, while inflation is still nowhere to be seen. Unsurprisingly, bonds are pretty weak here in Germany - the US$ is back down to 1.17 against the Euro - A$ under pressure and bounced from chart resistance at 81ct to just 79.4 today.

Base metals mixed - zinc is weak - nickel/tin a little better - but as the day progresses, everything is turning green agani! There seem to be some real legs to this rally - normally, I would have expected profit-taking following such a strong week.  Cobalt in London retreated over the last week or two from 6.000$t to 5700$/t.

Oceana Gold - had a disappointing Quarter at their new mine, Haile. Grades were much lower than expected, and the plant recovery was also below plan. Especially the grades are a bit of a worry - I guess recoveries will only need fine tuning. This is a real dent into their otherwise impeccable, operational performance in recent times....and a president, who is very subjective and emotional with regards to mining like Duerte, is not really serving them well in reducing country risk in the Phillipines. OGC is one of the best managed, Australian mining companies - one has to watch Haile carefully, but potentially, a nice buying opportunity developing here. But not yet!

Have a nice weekend!

I will be on holidays - might make the odd, unqualified commentary from the wonderful island Sylt!