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The ASX’s largest company BHP Group (ASX:BHP) – fitting for a brand already referred to as the Big Aussie – has dragged the entire ASX 200 up with it on an optimistic Wednesday as the stock lands close to +4% gains.
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A combination of two factors has seen BHP shares climb 3.8% back above A$61/share, which is within the range of its all-time high ~$65.
The first factor is a more optimistic Wall Street. U.S. inflation data came out overnight, and while a record cooldown in the data series was expected due to falling gas prices versus the start of the Iran War, the good news still came as a surprise.
Perhaps most crucially, U.S. core inflation also cooled back down to 2.6%; however, the U.S. Federal Reserve is more interested in Core PCE inflation (as opposed to CPI), which remains at 3.4%, adding colour to Fed head Kevin Warsh’s comments overnight suggesting the U.S. isn’t out of the inflationary woods yet.
Still, the good CPI news has reduced bets on bond markets that the U.S. Fed will deliver an interest rate hike this month, which also bodes well for U.S. earnings season, currently getting into the swing of it.
But it’s not just contagion upside helping BHP Wednesday – there are also concerns major global copper producer Chile is about to see its exports hampered.
A winter storm system is in the region, and if meteorological disaster cases are met, the storm could take out key transport networks, including ports.
Miners Codelco and Teck were among some of the big names called to an emergency moot with the relevant Chilean government officials to discuss contingency plans, according to reports from Bloomberg.
Ultimately, there are concerns the condition could remain in place for more than ‘one storm,’ creating a longer-term headache rather than one flash burst of volatile weather.
Copper futures were flat at US$6.32/lb heading into lunch Wednesday.
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