Japan is in the spotlight today although the Bank of Japan meeting surprised not on the size of the stimulus...but due to the comments on exports:
'As expected, the central bank on Tuesday maintained its pledge of increasing base money, its key monetary policy gauge, at an annual pace of 60-70 trillion yen ($590-$690 billion)...The BOJ said that exports have levelled off recently, which was a downgrade from last month, when the central bank said exports were on a recovery path'
Of course it is easy to jump to conclusions that weak Chinese AND Japanese export comments indicate a slowing global growth backdrop...and of course they could be right. Specifically on Japan though I notice that the Japanese seem to be emphasising value over volume in their export actions. Simply put, don't expect Japanese growth to be all about exports...it is all about the domestic economy which remains - in my view - disappointing. With new consumption taxes coming in next month the Japanese authorities need to stimulate further i.e. more QE and probably a weaker yen.
Much has been written about the iron ore market over the last few days and today (Tuesday) markets are quieter after the big Monday falls. You have to say that the inventory data is graphically stunning/worrying:
As interesting though is this chart (from the excellent www.macrobusiness.com.au website) which shows the differential between two major Australian miners and the iron ore price. Even with market friendly capex cuts and related it is a interesting chart...
...the value undoubtedly lays with more beaten-up names in the iron ore space such as Vale which I wrote about here, which has materially underperformed the names above (35% relative since September - actually worse than the iron ore price) and which fell below the interesting US$13 level yesterday. Of course there are risks...but opportunities too.