Miner stocks are topping the UK 100 this morning. This is thanks to more dovish than expected dollar-weakening words of wisdom from US Federal Reserve Chair Janet Yellen which have given a fillip to the dollar-denominated and stimulus/low-rate sensitive commodities space. UK-listed Miners are benefiting from an increase in risk appetite on expectations of lower global interest rates and accommodative policy for longer coupled and, most importantly, a now quasi-certainty that April is off the table in terms of another US rate hike.

Markets had been gearing up for a more hawkish update in light of recent FOMC member commentary, however, the Fed Chair took the dove firmly by the wings to leave markets (and possibly those recent message-muddying FOMC members) in no doubt that external factors (China, Oil) play just as much part in the pace of policy normalisation as improved US macro data. Possibly more so.

A jump in Chinese Consumer sentiment may also be helping, even if the underlying commodities prices themselves are trading mixed; Copper, Nickel and Zinc in the red but Iron Ore and precious metals Gold and Silver pushing higher. In addition, note some press discussion about value investing making a comeback and the possibility that Miners represent attractive opportunities at these still depressed levels assuming recent lows were indeed the bottom.

Mike van Dulken, Head of Research, 30 March