Dollar Hurts Miners....

March 26th, 2010  by Bryden Elssmann

Closing Data

	Current	Change	%
Dow Jones	10,841.21	5.06	0.0%
NASDAQ	2,397.41	-1.35	-0.1%
S P 500	1,165.73	-1.99	-0.2%
FTSE 100	5,727.65	49.77	0.9%
Nikkei 225	10,828.85	13.82	0.1%
ASX 200	4,873.30	-12.1	-0.3%
COMEX Gold - Dec 09	1,092.00	3.2	0.3%
COMEX Silver - Sep 09	16.741	0.1	0.6%
COMEX Copper - Sep 09	338	3.45	1.0%
WTI Spot	80.13	0.01	0.0%
AUD-USD	0.9076	0	0.0%
Aluminium	2,194.50	-36.5	-1.6%
Copper	7,310.50	-94	-1.3%
Lead	2,001.00	-135	-6.3%
Nickel	22,195.00	-145	-0.6%
Tin	17,250.00	-300	-1.7%
Zinc	2,182.50	-53.5	-2.4%

Wall Street closed mixed, the Dow finished up 5.06 points or 0.05 percent to 10841.21 while the S&P 500 ended the session negatively, down 1.99 points or 0.17 percent.

The market was positive for most of the session until a strengthening US dollar abruptly evaporated a 120 point rally on the Dow sapping gains in commodities and related stocks. Upbeat results from the retail and technology sectors were not enough to curb the widespread effect of the strengthening US dollar.

The US dollar reached a 10 month high versus the Euro after the European Central Bank said it is getting help from the International Monetary Fund to solve the region’s debt problems. The announcement rattled currency traders as questions about the credibility of the Euro were raised.

The Australian share market should open down this morning after gains on Wall Street turned mostly negative towards the close.

Company News

Rio Tinto and BHP Billiton’s planned iron ore production joint venture in the Pilbara, in Western Australia has hit another roadblock. Last night the Australian Competition and Consumer Commission said the proposed joint venture ''may raise competition concerns in relation to the global shipping and Australian markets for the supply of iron ore". The competition watchdog wants more information to determine whether the deal results in a reduction of competition – which would be the trigger for the rejection of the joint venture under Australian competition law. Up until now, both miners had probably thought the only obstacle to the joint venture would be the European Union's competition regulators, who have to answer the concerns of Europe's steel producers. Rio Tinto’s 2009 net profit of $5.4 billion was an improved result on the year before.

Brambles, the pallet supplier and information management company, plans to repay some of its debt after selling US$750 million worth of guaranteed senior notes in the US bond market. It is the first public bond issue for Brambles, which has previously raised debt in the bank loan and US private debt markets. Brambles will use the funding to repay borrowings under its existing revolving bank credit facilities. The two issues include a $US500 million guaranteed senior note and a $US250 million guaranteed senior note, offered at a fixed-rate, which will be issued by Brambles USA. The $US500 million bond has a coupon of 5.35% for a term of 10 years. The $US250 million bond has a coupon of 3.95% for five years. Bramble’s 2009 net profit was $557 million – that result lower than the two years before.

Santos rallied yesterday on short covering following a report in the Sydney Morning Helrald that Woodside may consider a $15b bid for Santos to gain access to QLD’s gas sector. WPL may sell Santos’s gas interests in other states to defray the cost of the purchase, the newspaper reported. The talks have been described as “chatter” by analysts. Yesterday afternoon Santos announced, following a query by the ASX, that it has not been approached by Woodside and offered a takeover.

Sell Calls

For clients who were not exercised on their holdings, notably NCM, today may be suitable to sell calls out to April.

Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.

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