Glencore (GLEN) shares are leading the UK Index Mining sector higher this morning, maintaining their recovery trend from mid-month lows. This despite some indirect USD strength from the Bank of Japan’s (BoJ) decision to join major peers like the ECB and SNB and take interest rates negative, thus weakening the JPY. Sentiment buoyed by confidence in globally low interest rates (and stimulus) for longer (markets still addicted to cheap money) as well as yesterday’s rally in the oil price, even if its provenance was what rather questionable Russian talk of a coordinated global production cuts, already heartily denied by OPEC powers. Copper’s continued progress from lows is likely assisting things along with Gold’s recent breakout taking the sting out of the 18-month commodity rout, despite supply gluts in the face of uncertain global growth. Chinese equities up for their first day in four also a potential booster at a time when so much hinges on sentiment towards growth in the world’s #2 economy, even if the problem is likely more the result of mining over-supply than economic under-demand. Painful measures being taken in the sector is a god sign, restoring faith. Can GLEN make it back above the now key 100p mark which represents early Dec highs and looms large in terms of falling highs since September.

Mike van Dulken, Head of Research