Market overview: Vicious profit-taking in basic resource space

1630:Close Chinese data and a bearish call on the commodities space saw miners caught in a downdraft on Tuesday which sent the DJ Stoxx 600 gauge of basic resource stocks fall by over 9% (after a near 50% rally from their most recent lows). Three-month copper futures on the LME finished the session 2.8% down to $4,861.00 per metric tonne, alongside a similar drop in crude oil futures. Burberry on the other hand benefitted from speculation that a possible bid for the company might be in the offing. To take note of, speaking on Bloomberg TV the DFT’s Wolfgang Munchau called on the ECB to take bolder action than just increasing the size of the central bank’s QE programme, urging that it buy banks’ bad loans and push for cross-border M&A in the sector as a means of restoring the Eurozone financial system to health. FTSE 100 down 56.96 to 6,125.44.

1515: Economists have pushed back their forecasts for the timing of the first interest rate hike from the Bank of England for the third time this year, according to the latest poll from Reuters. However, it was a 'close call' the newswire reported, saying that just under half the economists were expecting a move in the fourth quarter or earlier, while the other half was expecting a delay until at least 2017.

1510: Front-month Brent crude futures were 2.18% lower to $39.97 per barrel on the ICE.

1442: LSE and Deustche Boerse are expected to to announce much a merger agreement next week.

1330: Three-month copper futures are edging lower by 0.3% to $4,973.50 per metric tonne on the LME.

1220: Goldman Sachs stuck to its forecast for an iron ore price of $35 a tonne at the end of 2016 in a research note published yesterday but which is making the rounds today. Recent gains in the price were driven by the need for higher steel prices so that mills' margins increased enough to justify restarting production, the broker's commodities team led by Jeffrie Currie told clients. "We believe this rally too will likely prove temporary and are maintaining our end-of-year target of $35/t," Goldman said.

1219: Citi is none too bullish about the outlook for iron ore prices this year. The broker has told clients it "remains bearish short-to-medium term iron ore prices despite the recent price rally by over 60% from 2015 lows and a gravity defying 20% rise in a single trading session this week. Headlines about a memorandum of understanding between Vale and Fortescue might have implications for iron ore price support in the longer term however near term we continue to expect an oversupplied market short term."

1107: Some of the questions from the Treasury Select Committee have broached the subject of what the impact of Brexit on the City might be. Carney has indicated that some banks might decide to leave London and that renegotiating protections for the City would be a long process. In response to one question in particular, he said it was hard to reach a judgement on what the long-term consequences for financial stability might be, although in the short-term there could be a negative implications. As of 11:12 GMT the yield on the benchmark 10-year Gilt was down by nine basis points to 1.39% but cable was only off slightly, edging down by 0.35% to 1.4216.

1026: Iron ore prices are being quoted is being quoted at$ 59.5 per tonne in Chinese trading, just slightly off yesterday’s level of $60 per tonne.

0930: The yield on the benchmark 10-year Gilt is down by eight basis points to 1.40%. Initial remarks from Carney are focusing on not being drawn into making any judgements or remarks that might be politically very sensitive. He also appears to have tried to lay some ground rules for his testimony so that his answers are not seen as supporting one side or the other but simply answering the exact questions made of him.

0829: Worse than expected export data out of China seems to have given traders an excuse to book some profits, with miners at the bottom of the pile following a spike in iron ore prices on Monday that was labelled by some as "incredible", "unprecedented" and "berserk". Nonetheless, some economists detected signs of strength for commodities in the Chinese data and pointed to seasonal factors as having biased the export figures downwards. That came ahead of today's Treasury Select Committee hearing from the BoE's Carney and Cunliffe on the financial costs and benefits of EU membership. FTSE 100 down 64.55 points to 6,117.55.