Hey! I Know May Stole The Show But Don’t Forget Iron Ore Is Collapsing

Well, needless to say, Theresa May stole the overseas spotlight this morning when, just after 6 am EST, she called for snap elections in the UK.

That triggered a knee-jerk move higher in GBP/USD and a concurrent jump in gilt yields:

But it was a sharp move lower in iron ore that weighed on risk sentiment overnight as futures dropped 3.7%, following a nearly 2% move lower on Monday. As Bloomberg notes, “the raw material for steel-making entered a bear market this month as a procession of analysts, Australia’s government and even some miners said gains were unsustainable.”

For whatever this is worth, Bloomberg also notes that “the 14-day relative strength index is also at its lowest since December 2015, when it hit a record bottom on data going back to 2008.”

Meanwhile, the Aussie dropped after minutes from the RBA’s April meeting showed policy makers think the labor market has been “somewhat weaker than expected.”

The dollar generally held up following Monday’s comments from Treasury Secretary Steve Mnuchin that traders interpreted (rightly or wrongly) as an attempt to walk back remarks Donald Trump made last week about a weaker dollar and lower rates.

Asian stocks were mixed (Monday’s late day dollar strength pushed the yen weaker) but Australia’s S&P/ASX 200 did fall nearly 1% in its first trading day since Thursday, after the worst two-day stretch for raw-materials shares in a year, while May’s call for elections weighed on European shares.