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Bad Week for Oil and Iron Ore Gets Worse, Spurring Contagion

  • Charts show almost immediate reaction to break of $45 a barrel
  • ‘There’s nowhere really to hide,’ says Shaw’s James Audiss
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Chinese Iron-Ore Traders Flee Market

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Within minutes of U.S. crude-oil futures tumbling through $45 a barrel, signs of a broader risk-off swing started to emerge in markets, exacerbating what was already brewing as a worrying week for commodities.

Oil’s retreat to a level not seen since OPEC forged its landmark agreement to cut output last November stoked declines from iron ore to industrial metals and losses that many commentators had been putting down to individual supply and demand factors. The deterioration in sentiment carried through to the currency market, where the key risk barometer in Asia -- the yen -- spiked higher against the dollar as stock losses from Australia to Hong Kong gathered pace. Bright spots remained, though, with some emerging equities still up.