Commodity prices ease on softness in ferrous markets

March 12, 2015 - Weekly Pricing Pulse

The IHS Markit Materials Price Index (MPI) fell 0.7% again last week, led by softness in ferrous metals, lumber, rubber, and chemical prices.

Commodity markets were paying close attention to Premier Li Keqiang's annual address before China's National People's Congress last week for a read on the health of the economy. Steel markets in particular found bearish tones in the lowered growth target, vows to cut overcapacity, and commitment to penalize polluters. In the aftermath, iron ore prices fell below $60 per metric ton for the first time since 2009.

While both Australia and Canada resisted market pressure to cut interest rates last week, India and Poland became the latest in a string of central banks to ease monetary policy. The dollar was treated to a late-week boost by a strong US labor report that beat expectations, although underemployment, participation, and still sticky wages remain concerns. Despite these reservations, two-year Treasuries touched a new high for the year, as the ongoing debate persists over whether the Federal Reserve's first rate hike in nearly a decade will come in June or September.

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