No surprises in Rio Tinto s numbers Australia s central bank expected to cut rates

Rio Tinto’s quarterly number was largely in line with expectations, but perhaps slightly negative for those expecting a positive surprise. As expected, weather has impacted operations.

The comparable numbers are mostly higher compared to the same period last year but lower when compared to the September quarter of last year.

Weather has been a factor during the past three months with cyclones and floods interrupting production in crucial parts of Australia. Rio Tinto generates a large majority of its earnings from its Pilbara iron ore operations. Production from its iron ore mines fell to 46 million tonnes in the quarter versus 51.2 million tonnes in the previous quarter.

In currencies, the Australian dollar continued to weaken after the Reserve Bank of Australia’s monthly meeting minutes were released. The case for a rate cut has been strengthened from the comments with all eyes on inflation number due later this month.

The market is now starting to price a 25 basis point cut as very likely. The Euro managed to post some gains, last at 1.3108 against the US dollar while the Japanese Yen was virtually flat on the US dollar.

Gold was last slightly lower at US$1648/oz while copper was steady at around US$3.62/lb.

In other regional economic news, India’s central bank cut the benchmark repo rate by 50 basis points today to 8%, in line with our BRIC economies who are easing their monetary policy are growth consolidates.

The reserve ratio requirements were left unchanged. Comments from the central bank included an admission of modest slowdown in the economy with GDP growth now forecast at 7.3% for the 2012-13 financial year. Future policy will remain accommodative and the bank says it will take proactive steps to restore market confidence.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.