BusinessNow: Live coverage of financial markets and companies, plus analysis and opinion
Gold stocks have been hammered, while the broader market is in the red.
- Bondcano edging closer?
- Rinehart expands cattle empire
- Gold stocks smashed
- Elliott quizzed on Oswals
- What’s next for bank stocks?
- We failed customers: Elliott
- ANZ’s Elliott takes the hot seat
Welcome to the BusinessNow blog. Gold stocks are getting hammered today after the gold price suffered its largest one-day decline since June 2015.
7.54pm:Don’t discount taper talk
David Rogers
If investors really believed that the European Central Bank was considering tapering its €80 billion ($118bn) per month quantitative easing (bond buying) program before it expires in March 2017, the reaction in global financial markets on Wednesday would have been much greater.
But while the market is understandably sceptical, it’s hard to discount the possibility that the ECB has indeed floated a plan to start tapering.
The consensus has in fact been that the ECB will extend its QE program, so when Bloomberg reported that unnamed ECB officials said the central bank will probably wind down its bond purchases before March, it caused a sharp rise in European bond yields that flowed through to global bonds, equities and precious metals.
Together with property, these assets have been major beneficiaries of central bank bond buying, which has been a major driver of record-low interest rates and liquidity globally. A reduction in ECB bond buying could trigger a substantial correction across the board, similar to that seen after former Federal Reserve chairman Ben Bernanke floated a tapering of US QE on May 22, 2013. Read more.
7.02pm:European stocks edge back
Europe’s main stock markets drifted lower at the open on Wednesday, after a round of bumper gains the previous day, as concerns grew over the future of central bank stimulus.
Expectations the US Federal Reserve will hike interest rates and the European Central Bank will also tighten monetary policy also dragged most Asian indices lower, dealers said.
In initial trade, London’s benchmark FTSE 100 index of top blue-chip companies dipped almost 0.1 per cent to 7,070.55 points, having soared on Tuesday as the pound hit a 31-year dollar low.
In the eurozone, Frankfurt’s DAX 30 slid 0.8 per cent to 10,535.62 points and the Paris CAC 40 shed 0.9 per cent compared with the close on Tuesday to 4,462.72.
“European equity markets are on the back foot as concerns grow that central banks are going to pare back accommodative policy -- with the ECB potentially tapering bond purchases and previously dovish Fed members ramping up expectations of an interest rate rise this year,” said Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor.
“Both equity and bond market valuations have been founded on monetary support from global central banks and have arguably become hooked on quantitative easing and low interest rates.
“The possibility of central banks returning to a more normal regime could see taper tantrums resume, volatility spike and investors flee.”
The region’s indices had charged higher on Tuesday, with London soaring after Prime Minister Theresa May pledged to kick start the Brexit process by the end of March 2017.
The pound tumbled to a fresh 31-year low below $1.27 after May set out a timetable for leaving the European Union by 2019. AFP
6.01pm:Asian stocks mixed as Fed eyed
Asian stock markets were mixed on Wednesday as comments from Federal Reserve officials strengthened expectations of a rate hike by the Fed within this year.
Helped by a weaker yen, Japan’s Nikkei 225 rose 0.5 per cent to 16,819.24. And Hong Kong’s Hang Seng index gained 0.4 per cent to 23,781.26. But South Korea’s Kospi was 0.1 per cent lower at 2,053.09.
Meanwhile, China’s Shanghai Composite Index was closed for a holiday.
Comments by several Federal Reserve officials strengthened investor expectations that the Fed would increase interest rates this year.
Federal Reserve Bank of Richmond President Jeffrey Lacker said rates need to be increased to keep inflation under control.
That echoed the view held by Cleveland Federal Reserve President Loretta Mester, who said in an interview with Bloomberg that the economy is ripe for an interest rate increase.
The Fed is expected by most investors to wait until December to raise rates. AP
5.21pm:BHP eyes petroleum investment
BHP Billiton has outlined plans to gradually expand its petroleum business, signaling new projects were becoming more attractive because of lower costs while forecasting prices for oil and gas to recover more quickly than other commodities it produces.
BHP said on Wednesday that rising oil demand, declining output from existing fields and a lack of major new projects, due to the downturn, is “expected to create a significant opportunity to invest” in the sector. Read more.
4.25pm:Resources drag stocks lower
The Australian sharemarket has broken this week’s winning streak as a rally in the nation’s two biggest banks failed to offset weakness in the resources space, writes Daniel Palmer.
At the close, the benchmark S&P/ASX 200 index gave back 31.1 points, or 0.57 per cent, to 5,452.9, while the broader All Ordinaries index lost 32.9 points, or 0.59 per cent, to 5,537.
The red session followed a similarly lacklustre performance on Wall Street as fears were again raised on the risk extremely loose monetary policy would soon be unwound.
Gold suffered its heaviest fall for almost 18 months as the non-yielding asset was viewed as the biggest loser in an environment of rising rates.
In contrast, banks have the potential to win out from any change in policy that sees rates rise.
Australian investors viewed the situation as such, ensuring financials were among the outperformers of the soft session. Read more.
4.11pm:FIRB chairman delays Carlyle role
Foreign Investment Review Board chairman Brian Wilson has made a quick retreat from plans to join private equity giant The Carlyle Group in a bid to allay conflict of interest fears, writes Daniel Palmer.
Mr Wilson accepted an advisory role at Carlyle on September 5, with the consequent backlash leading to him postponing his appointment until April next year when his term as FIRB chairman comes to an end.
“To ensure there can be no question as to the integrity of Australia’s foreign investment review system I have decided to suspend the commencement of my proposed role with The Carlyle Group,” he said.
3.50pm:Start-up advice from Silicon Valley
Australian entrepreneurs should focus on creating businesses that play to Australia’s strengths and avoid starting businesses that duplicate the offering of global players, according to expats working on both the founder and venture capital sides of the Silicon Valley tech ecosystem.
“Don’t just try to do in Australia what is done elsewhere,” Zetta Venture Partners managing director Ash Fontana told The Australian. “Try to do in Australia what can especially be done in Australia.”
“Which industries are particularly strong in Australia? What needs do they have for technology? Ask yourself those two questions and then work on those problems.”
Elizabeth Redman
3.30pm:Saving for your first house?
Australians have always been told the same sort of thing — ‘work hard, save, and when you’re ready to start a family you should buy a house’.
That no longer applies. To buy a house in a city, which is where the work is, requires a deposit that is no longer within reach of first home buyers.
And yet the Australian household saving rate remains high. Why? What are Aussies without a mortgage saving for if it’s not a house?
Watch the video for more
3.15pm:Is the ‘bondcano’ edging closer?
Australian stocks treated like proxies for government bonds are being hit hard today… Is this the ‘bondcano’ that Credit Suisse has been going on about?
Stocks such as Transurban, Scentre, Westfield, Telstra and property trusts have been favoured in the low-growth market because of their high and reliable dividends; they’re seen to be a safe option for a return in a low-interest rate environment. But as bond yields shoot higher, their ASX equivalents are hurting.
The Australian 10-year treasury yield has lifted 5 basis points today to sit at 2.12 per cent, not far below the September high of 2.17 per cent.
The Aussie move follows a six point rise in the US and a sharp rise in German bund yields.
In the sharemarket, market darling Transurban is down a nasty 3.6 per cent today, which is its worst fall since September last year, while Sydney Airport has dropped 2.1 per cent, Westfield is down 1.9 per cent and Telstra has given up 1.2 per cent.
Meanwhile the ASX 200 is down a much shallower 0.5 per cent.
Read: The bull market in bonds is not over yet
Read: Bondcano tremors put stocks on shaky ground
2.47pm:Gold stocks feel the heat
Australia’s gold miners are in the firing line on the ASX today after spot gold marked its heaviest one-day retreat in almost 18 months overnight, writes Daniel Palmer.
The price of the precious metal skidded 3.3 per cent to a post-Brexit vote trough of $US1,266.8 by the end of US trade as worries about a pullback in central bank stimulus forced bond yields higher.
It has recovered above $US1,270 during Asian trade, but remains well below where it stood during local trade yesterday and its weakness is pressuring local gold stocks.
Sector behemoth Newcrest (NCM) was off 5.5 per cent at $21.205 at 2pm (AEDT), while smaller rivals Evolution (EVN), St Barbara (SBM) and Regis Resources (RRL) plunged 8.3 per cent, 7.8 per cent and 6.3 per cent, respectively.
2.01pm:Windward soars on Independence bid
A talisman of improving sentiment in the junior mining sector, WA nickel and gold explorer Windward Resources is the focus of interest of two competing parties, including the $2.3bn market cap Independence Group.
Independence (IGO) today revealed itself as the mystery bidder for Windward (WIN), which holds ground surrounding its spectacular Nova-Bollinger nickel deposit in the Fraser Range region.
In lobbing a $20m, 19c-a-share offer, Independence trumps last month’s “funding arrangement” from aspiring gold producer Eastern Goldfields.
Windward shares soared 46 per cent on resumption of trading this morning. The stock traded at 5c at the start of the year.
Independence shares suffered the usual bidders’ droop, down 6 per cent.
Tim Boreham
1.41pm:Rinehart expands cattle empire
Gina Rinehart has expanded her fast-growing agricultural operation through the purchase of 1,500 fullblood wagyu cattle, writes Daniel Palmer.
Ms Rinehart’s Hancock Prospecting announced the deal this morning, with the acquisition coming from renowned Victorian-based breeder David Blackmore and Queensland-based Mal Burston.
The breeder herd will be located on the group’s recently purchased cattle properties near Dubbo in New South Wales, while progeny cattle will move to Hancock’s Queensland stations.
1.16pm:Aussie stock valuations stretched: MS
September saw Australian shares continue to ignore higher valuations, with a moderately positive monthly return obscuring the view of stretched valuations and expensive stocks.
“Valuations remain stretched. The headwind of higher multiples evident in the Australian market remains in place,” Morgan Stanley analysts, led by Chris Nicol, said.
“On a 12-month forward basis the ASX 200 is trading on 16.2x, continuing the recent trend of elevated multiples in the absence of a meaningful turn in earnings levels.
“All Industrials ex-financials continue to trade at around 20x forward earnings, financials remain above the long-run average while resources’ P/E [price to earnings] has passed peak and sits at 20x forward (or 12.5x assuming spot commodity prices).”
Resources were a bright spot in September, while Morgan Stanley notes bond proxies and telcos unwound, which contributed to a weaker mid-cap sector.
The analysts are recommending investors hold their nerve and stay overweight on resources.
“The materials sector contributed 83bp to returns for the month and is the clear standout this calendar year, with the sector now representing 15.6 per cent of the Index.
“Over September the biggest positive contributors to sector and market performance were BHP (+48bp), S32(+19) and Rio Tinto (+12).
“We continue to recommend a broad-based overweight across materials and energy”.
12.33pm:ANZ may cease political donations
ANZ Banking Group has revealed it is debating whether the lender should end donations to Labor and the Coalition amid rising public pressure on corporate donations, writes Michael Roddan.
It comes after National Australia Bank quietly banned all political donations from May this year following a review of its political donations policy.
The big four banks, which are being grilled by parliamentarians at this week’s banking inquiry, have donated generously to both major political parties.
Prompted by a question from Greens MP Adam Bandt, whose party has so far missed out on the lucrative corporate donations, ANZ chief executive Shayne Elliott said the bank’s board is discussing political donations and future policy.
12.20pm:ANZ lending to small business on rise
Elliott says lending to small business is growing at 13-15 per cent each year, but says “a lot of small businesses don’t need debt” and the bank is also helping with small business services.
“It’s not huge but I want it to be bigger. There is a transition happening in the economy ... and we want to be part of that and help those businesses set up,” he says.
“What people want is a really competitive rate, and then they want the right service proposition.”
Jared Owens
12.15pm:Live now: Q&A on bank stocks
James Kirby is taking your questions now on bank stocks. Don’t miss out!
Click here to submit questions and read what James has to say.
12.05pm:Aussie dollar pushes higher on retail data
AUD/USD edged up to an intraday high of 0.7624 after stronger-than-expected retail sales data. Retail sales rose to 0.4 per cent in August, beating an expected 0.2 per cent rise.
However, the data haven’t moved the dial as far as interest rate expectations go, with three-year bond yields little changed after an early rise caused by offshore weakness.
AUD/USD was last at 0.7620.
12.01pm:ANZ grilled on TimberCorp
Bandt asks about failed business TimberCorp and whether investors were required to put up their own homes as collateral, writes Jared Owens.
Hodges says the bank loaned to the corporate entity and the bank imposed no such conditions.
“Our financial planners did not have TimberCorp on the approved product list,” he said, saying ANZ’s financial planning framework was “conservative”.
11.55am:ASX 200 hits 2-day low
Australia’s S&P/ASX 200 has fallen 0.7 per cent to a two-day low of 5445.8, nearing initial chart support from a former daily pivot point around 5435.
A break there could trigger a test of last week’s low at 5372.3, which was near the 100-day moving average, now at 5384.7.
However, while there’s so far been no meaningful unwind of the selloff caused by Bloomberg’s report that the ECB was moving toward tapering, rather than extending its QE program, spot gold and US treasury bond prices are trying to bounce a bit here.
Moreover, the S&P/ASX 200 selloff today looks a bit stretched given that overnight futures fair value had pointed to a 0.4 per cent decline.
11.45am:Retail sales on the rise
Australian retail turnover lifted 0.4 per cent in August, an improvement on the prior month’s flat showing, writes Daniel Palmer.
The official figures, released by the Australian Bureau of Statistics, comfortably outstripped expectations for a modest 0.2 per cent rise.
The acceleration in retail activity was driven by department stores, which recorded a 3.5 per cent jump in turnover in seasonally adjusted terms.
11.33am:Inquiry MPs need to do their homework
It was more what Commonwealth Bank chief Ian Narev didn’t say or wasn’t pressed about at yesterday’s parliamentary bank hearings that matters for investors -- and they know it, writes Michael Bennet.
Narev battered away the majority of questions from MPs, only stumbling in explaining the record high margin between small business loans and credit card interest rates and the cash rate, plus attempting to play down the free kick from the government guarantee if CBA was on the brink.
Indeed, despite Narev’s performance, he didn’t really have to raise much of a sweat as politicians focused on the bank’s scandals previously covered off in other forums and other issues of the nation’s biggest lender.
11.10am:ECB taper story doesn’t make sense: Saxo
Saxo Bank strategist Kay Van-Petersen has slammed Bloomberg’s report that the ECB is building a consensus to taper its QE program, which sparked a sharp rise in bond yields and a dive in spot gold overnight.
“IMHO this is complete BS — not to mention irresponsible of the ‘ECB officials’,” Saxo’s Van-Petersen says in an email.
“If it is really from ECB officials, then it reeks of politics and is not going to be on the cards anytime soon, and definitely not before you have gotten through the Italian referendum on Dec 4 nor worked through Brexit details ... and what about the lack of inflation?”
He feels the ECB is almost certain to extend the asset purchase program through March 2017, adding that: “if the ECB was to hypothetically throw in the towel at some point, the euro would lift by 2-3 figures easily and bund yields would fly.”
Ten-year bund yields jumped from -0.09 per cent to -0.04 per cent on the news and US 10-year Treasury yields jumped from about 1.64 per cent to 1.69 per cent.
Spot gold slumped 3.3 per cent overnight, its biggest one-day fall since June 2015.
If Van-Petersen is right, expect a snap reversal tonight. No sign of this yet, however.
11.00am:Market “intensely competitive”: Elliott
Conroy asks whether the “oligopolistic” situation where five banks dominate 82 per cent of the market is healthy, writes Jared Owens.
Ellott denies there is a lack of competition, saying Australia has an “intensely competitive” market and the ANZ fights every day to boost its market segment.
10.55am:Elliott defends paid fin planner referrals
Elliott defends paying bank tellers extra to refer their customers to financial planners, writes Jared Owens.
“Referring customers to a specialist to have a conversation about their financial health is a good thing,” he says.
Asked if he’s confident bank managers are not pressuring tellers to make needless referrals, Elliott says employees facing duress, pressure or harassment have avenues to complain about their bosses.
“I am proud of the culture of our bank. Having said that ... we have made mistakes,” he said.
10.49am:Estia in halt ahead of Q1 update
Embattled aged care operator Estia Health has entered a trading halt pending an update on its first quarter trading, writes Daniel Palmer.
The suspension in trading comes amid a period of tumult at the ASX-listed group that has seen its shares pummelled on concerns around government funding and its inability to meet market expectations.
Last month, its chief executive Paul Gregersen stepped down, with his departure following on the heels of the sudden exit of founder Peter Arvanitis from the board and significant shareholder register.
It leaves investors nervous on the detail of the trading update, which is due by the end of the week.
10.40am:Gold stocks smashed
Gold stocks have been pummelled after spot gold fell 3.3 per cent to a three-month low of $US1266.8 last night.
Newcrest is down 6.6 per cent at $20.95 in early trade, while Evolution, St Barbara and Resolute are down about 8 per cent each.
The biggest one-day fall in spot gold since June 2015 came alongside a sell-off in bonds after Bloomberg reported that unnamed ECB officials said an informal consensus has built among ECB members in the past month that its asset buying will have to be tapered once a decision is taken to end the program, though they didn’t exclude that QE could still be extended past the current end-date of March 2017 at the full pace of EUR80bn a month.
10.35am:Stocks slide at open
The Australian sharemarket has weakened at the open after commodity prices and Wall Street dipped overnight, writes Daniel Palmer.
At the 10.15am (AEDT) official market open, the benchmark S&P/ASX 200 index weakened 26.9 points, or 0.49 per cent, to 5,457.1, while the broader All Ordinaries index gave back 28.1 points, or 0.5 per cent, to 5,541.8.
IG chief market strategist Chris Weston said investors were growing wary on the prospect of a shift in monetary policy in several key regions.
“Gold stocks will predictably get smashed on open, but banks are key today given the moves higher in fixed income and some unwind of the hunt for yield trade,” Mr Weston said.
The big four banks were mixed, with ANZ mirroring CBA yesterday in underperforming as it faced public scrutiny.
ANZ lost 0.1 per cent, NAB was flat, CBA rebounded 0.2 per cent and Westpac added 0.5 per cent.
The resources sector was largely weaker given falls in base metals and a slowdown in momentum in oil prices.
Read more
10.29am:Syrah Resources dives 14%
Syrah Resources shares have slumped 14 per cent to a six-month low of $3.70 after Tolga Kumova resigned as managing director. Tolga plans to remain involved in the business as a consultant.
Before today’s decline, Syrah shares had risen 17 per cent since Jumova took on the MD role in Oct 2014, outperforming a 3.5 per cent rise in the ASX 200 index.
10.20am:Macau gaming revenue lifts
James Packer’s casino empire Crown Resorts finally has some cheer out of troubled gaming region Macau, with a lift in gaming revenue from the Asian gaming hub, writes Sarah-Jane Tasker.
Deutsche Bank told investors in a client note that Macau gross gaming revenue in September had increased by 7.4 per cent to MOP18.4bn, which was above market expectations of 4 per cent growth.
The increase was said to have been helped by high-single digit growth in mass and VIP gross gaming revenue that had turned positive after 28 months of decline.
Packer’s Crown Resorts has an interest in Macau-focused Melco Crown, which operates casinos in the region.
Deutsche Bank’s Mark Wilson said looking ahead, October figures out of Macau could disappoint against elevated market expectations given a proposed visit by Chinese Premier Li to Macau and a weaker-than-expected start to the “Golden Week”.
“Our earnings forecasts remain below those of the market given a forecast deterioration in margins amid increased competition,” he said in a client note.
“We retain our hold rating with Crown trading at a 9 per cent discount to our valuation of $14.35/share.”
Crown’s shares last traded at $13.10.
10.10am:Woolworths SA extends Australian reach
Woolworths Holdings, the South African retailer that owns up-market department store David Jones, has extended its reach into the Australian fashion sector after agreeing to buy menswear brand Politix, writes Eli Greenblat.
The purchase of Politix, for an undisclosed sum, will see Woolworths Holdings’ Australian fashion empire grow substantially with the chain owning 75 stores, including 31 concessions across the country and fiscal 2016 sales of $56 million.
Woolworths Holdings wholly owned subsidiary Country Road has snared the Politix brand, and the menswear group will sit alongside its other brands — Country Road, Witchery, Trenery and Mimco.
10.08am:Elliott quizzed on Oswals
Elliott and deputy CEO Graham Hodges are being asked about Pankaj Oswal, who has admitted to falsifying documents, writes Jared Owens.
Hodge says there was a “very detailed and intense” external investigation given the amount of money involved, and the bank “quickly moved to let the authorities know” once wrongdoing had been identified.
Asked why the bank entered further commercial dealings with Oswal despite the allegations of forgery, Elliott says the bank was “cautious” but aimed to complete a half-finished fertiliser plant with the Oswals to safeguard the bank’s shareholders’ interest.
Elliott notes a half-finished fertiliser plant is worth less than a vacant block of land.
“We had a lot of money out the door and our primary responsibility was to look after our asset,” he says.
10.00am:What’s next for bank stocks?
Wondering where bank stocks are headed and the outlook for your returns? Tune in to this week’s live Q&A session with James Kirby today from 12.15pm AEDT.
Submit your questions and follow the session here.
Also keep in mind that this is a general advice forum — we are not offering personal advice of any kind.
9.50am:ANZ not opposed to tracker mortgages
Chairman David Coleman, a Liberal MP, is turning to the issue of “tracker rate mortgages” that are pegged against independent benchmarks such as the RBA cash rate, rather than the whims of the banks.
Such loans are available overseas, but they impose a heavier risk burden on banks.
Elliott says there “probably is a market” for such loans, if people were willing to pay a premium for that stability.
“We’re not convinced there is a market to pay more for certainty,” he says. “If people want certainty in Australia they’ve tended to choose they would have a fixed rate.”
Elliott says he would not be opposed to the government mandating that banks offer such loans.
9.45am:Elliott defends not passing on full rate cuts
“The rates we offer are our main competitive weapon,” Mr Elliott said on the decision not to pass on RBA rate cuts in full, writes Daniel Palmer.
He added the RBA cash rate was only “one ingredient” in its costs and decisions needed to be competitive against rivals while offering a “fair return” for depositors and shareholders.
Follow our full coverage here
9.40am:AUD slips on GBP weakness, USD strength
The Australian dollar hit a two-day low of US76.08c last night, down from US76.74c before the RBA meeting, but the pullback is due to weakness in the British pound and subsequent strength in the US dollar against most currencies, rather than any dovish interpretation of the RBA statement.
The Australian dollar last traded at US76.16c.
9.30am:Elliott justifies bank profits
Elliott is getting on the front foot in relation to bank profits, writes Jared Owens.
“We reported an annual profit last year of around $7.5 billion and by anybody’s measure that is a lot of money. But we are a very large business with assets of almost $900 billion,” he says. “While our profit is large, it is less than 1 cent per dollar of the assets that we hold.”
Elliott says the bank has taken “sensible and pre-emptive” measures to bolster its bottom line to hedge against global instability, even though this may not be popular with shareholders.
Read more
9.24am:ANZ has ‘failed its customers’: Elliott
ANZ boss Shayne Elliott kicks off by admitting his bank has failed its customers and says public accountability is a “fair part of the process” as it goes about rectifying the problems.
He says the margin on loans and deposits has halved over the last two decades, and technological disruption will continue to provide better products for customers.
“When we fail them, it is our responsibility to find a fair and balanced resolution,” he says.
Jared Owens
Follow our live coverage here
9.13am:NAB hit by outage
National Australia Bank has apologised for an overnight outage that has impacted services to its customers, writes Daniel Palmer.
The issue has affected several of the bank’s systems, including its mobile internet banking facility, customer call centres and the processing of some payments.
“There has been a delay in processing some transactions. If customers need help accessing their money our branches and business banking centres will be open,” Andrew Hagger, chief customer officer, consumer banking and wealth at NAB, said.
Read more
8.43am:Sterling slumps as May sets a date
The pound fell to a three-decade low against the dollar on Tuesday, trading below the levels it hit after Britain voted to leave the European Union in June and spurring predictions of further volatility, Andrew Bird writes.
The currency fell by more than 0.8 per cent down to a low of $US1.2736 reaching almost 15 per cent below where it traded on June 23, the day the UK went to the polls. The pound was trading down against the euro at €1.1409, at its lowest level since 2013.
The latest stage in the pound’s decline came after UK Prime Minister Theresa May set a March date to begin exiting the EU and said full access to the country’s largest trading partner was a lower priority than controlling immigration.
Sterling has barely risen above $US1.34 since the referendum, as investors fret about the effects of Brexit on the British economy and the likelihood of further Bank of England action to support growth.
8.26am:Stocks to slip as ANZ takes the hot seat
Australian stocks look set to start the session lower as the nation’s eyes remain firmly on the big four bank CEOs.
Today will see ANZ’s Shayne Elliott take the hot seat in front of the Parliamentary inquiry, after CBA’s Ian Narev did his best to deflect Canberra’s concerns.
Read: Don’t regulate our profits, says Ian Narev
The SPI 200 is pointing to a 0.6 per cent fall today, but fair value suggests a 0.4 per cent decline in more likely.
CBA shares finished 0.3 per cent weaker yesterday, and saw a strong closing match, at $73.30, compared with an ASX 200 rise of 0.1 per cent to 5484 points, also with a healthy final match.
BHP Billiton is heading for a 0.8 per cent fall, according to its ADRs, and the resources sector will continue to trade without any direction from the price of iron ore, which China celebrating its national week and the commodity remaining unchanged at $US55.86.
7:20am:Wall Street wobbles
US stocks, bonds and gold prices fell, while the dollar rose as investors pulled back from some of this year’s most popular trades.
Many of Tuesday’s moves were a reversal of positions that were built up as the Federal Reserve put off raising interest rates. But many investors expect the central bank will act by the end of the year.
The Dow Jones Industrial Average flipped between gains and losses in early trading and closed down 85 points, or 0.5 per cent, at 18,168. The S&P 500 fell 0.5 per cent and the Nasdaq Composite slipped 0.2 per cent.
6:50am: Local market set to open lower
The Australian market looks set to open lower after Wall Street fell for a second day as investors fretted about Britain’s exit from the EU and the prospect of a Federal Reserve interest rate hike in coming months. At 6:45 (AEDT) on Wednesday, the share price index was down 31 points at 5,442.
In Australia, the market on Tuesday rebounded to finish slightly higher after the Reserve Bank held the cash rate at 1.5 per cent. The benchmark S&P/ASX200 index rose 5.5 points, or 0.1 per cent, to 5,484 points. The broader All Ordinaries index gained 5.1 points, or 0.09 per cent, to 5,569.9 points.
AAP
6:45am:Dollar dips against greenback
The Australian dollar has fallen against a range of currencies including its US counterpart.
At 6:35 (AEDT), the local unit was trading at 76.26 US cents, down from 76.74 cents on Tuesday.
AAP
6.30am:Iron ore slides to $US55 a tonne
The iron ore price has fallen for the third straight session to trade exactly in line with forecasts provided in the May Budget, and it could be set to fall through the key threshold if the current trend continues.
Iron ore inched down 0.2 per cent to $US55.00 a tonne overnight, according to The Steel Index, from $US55.10 yesterday.
6:00am:Wall St weakens
US stocks, bonds and gold prices fell, while the dollar rose as investors pulled back from some of this year’s most popular trades.
Many moves were a reversal of positions that were built up as the Federal Reserve put off raising interest rates. But many investors expect the central bank will act by the end of the year.
With an hour left of trade, the Dow Jones Industrial Average was down 127 points, or 0.7 per cent, at 18,127. The S&P 500 fell 0.8 per cent and the Nasdaq Composite slipped 0.5 per cent.
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Trump’s trade war tariff thaw
In a thawing of relations, the US will delay raising tariffs on Chinese goods after “substantial progress” in trade talks.
China puts heat on coal miners
Shares in pure-play coal miners pared early sharp losses as fears of China port ban eased throughout the session.
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