Trading Day blog: live markets coverage; Steeper path for bank shares: UBS; plus analysis and opinion
Local gains evaporate after an anticipated Fed rate hike, while the dollar soars on heavily-scrutinised jobs data.
And that’s the Trading Day blog for Thursday, December 14.
5.01pm: ASX reverses gains, closes in the red
Local trade lost momentum and erased early gains following a widely expected Fed rate hike and passage of stimulatory US tax legislation.
The benchmark S & P/ASX200 index closed down 0.2 per cent, or 10.5 points on 6011.3, while the broader All Ordinaries index closed down 0.1 per cent, or 6.7 points to 6096.4.
Aussie dollar strength reduced appetite for offshore earners, according to CMC chief market analysts Ric Spooner, while select corporate news hit key stocks.
“The biggest piece of news was weak [US] inflation and an ongoing ‘goldilocks’ scenario in the US, but unlike the currency and bonds markets, the stock market had already assumed that,” says Mr. Spooner
“We saw that play out with some profit taking in the Asian timezone.”
Read: CBA faces terror finance claims, writes Michael Roddan
Read: ACCC opposes Woolies’ BP deal, writes Eli Greenblat
Sarah Jane-Tasker 4.58pm: Crown reveals $783m fire sale
The James Packer-backed Crown Resorts has revealed more than $US600 million in planned asset sales, including the divestment of its Las Vegas interest, as it continues to focus on reducing debt.
The company announced to the market today that it had entered several transactions, including the $US300m sale of its Las Vegas land.
Alon Las Vegas Resorts, which is a majority owned subsidiary of Crown, will sell its interest in a 34.6 acre vacant site on Las Vegas Boulevard to a subsidiary of Wynn Resorts. Crown said that the transaction should complete in late January and its gross proceeds from the sale were expected to be around $US264m. Crown had written down the carrying value of its investment in Alon to $US200m in June.
The asset sales revealed today also include Mr Packer’s private investment vehicle, Consolidated Press Holdings and an entity associated with his sister Gretel, picking up Crown’s interest in the Ellerston property in NSW’s Hunter Valley region for $62.5m.
More to come.
Eli Greenblat 4.35pm: BP vows to ‘escalate’ Woolies bid
BP Australia president Andy Holmes has vowed to “escalate” its legal campaign to acquire Woolworths’ petrol stations after an informal merger proposal was opposed by the competition regulator this morning, and is set to challenge the ruling in court.
Mr Holmes told The Australian this afternoon he had some “fundamental concerns’’ about the Australian Competition and Consumer Commission’s analysis that led it to its decision, and that he would soon reveal his next step that would likely see the matter taken to the Federal Court or the Australian Competition Tribunal.
He said that Woolworths (WOW) was fully supportive of his view that the ACCC’s opposition to the deal should be taken to a court or tribunal where a decision would be made on the evidence of the case.
Elizabeth Redman 3.52pm: Home price hot spots revealed
Housing prices in Sydney’s west have been rising faster than anywhere else across Australia’s capital cities over the past five years, according to property researcher CoreLogic.
The Baulkham Hills and Hawkesbury region topped a ranking of price growth across the regions of the nation’s capital cities, with a 12.1 per cent annual rise for the five years to November.
3.27pm: Aussie dollar foothold shaken
Economists are poking holes in the national statistician’s November employment read that sent the Australian dollar soaring on its release earlier today.
Rotation to a sample with a higher participation rate likely helped along a surprise jump in November job adds, according to NAB chief economist Ivan Colhoun, though he leaves room for the possibility it could have equally corrected an “under-read” from the sample prior.
Meanwhile, JPMorgan highlights the caution with which it has approached the jobs data this year in the rollout of the National Disability Insurance Sheme (NDIS).
“Much of the recent acceleration in employment and participation is the result of hiring and participation spillovers related to the national [NDIS] rollout,” says JPMorgan economist Tom Kennedy
“Next week’s ABS quarterly employment data by industry will provide an important update on this view, with employment growth once again expected to be strong across the health and social services sectors.”
NAB remains generally upbeat about the jobs read, encouraged by consistent full-time employment growth, while JPMorgan cautions persistent wage growth stagnation will require further reductions in already low unemployment to trigger any shift in officials’ ‘neutral’ policy outlook.
2.58pm: Bitcoin’s little black book
James Mackintosh writes:
The big names in bitcoin get a lot of airtime: Former hedge-fund manager Mike Novogratz, antivirus millionaire John McAfee and the Winklevoss twins are the public faces of the cryptocurrency bubble.
Their bitcoin profits pale into insignificance compared with the riches bestowed on Michael Poutre, at least on paper.
This week the skyrocketing price of his unknown company made him a paper billionaire richer than any of them — and at Monday’s high of $US3.9 billion, worth more than 1980s junk bond king Michael Milken or movie mogul Steven Spielberg, according to the Forbes 400 ranking — read more
The Wall Street Journal
2.45pm: The Trading Day ahead
Join the conversation with our Trading Day experts for breaking news and analysis in financial markets here and on Sky News Business (Ch: 602)
NOW: Michael Buckely — Managing Director, Accenture
3.00pm: John Abernethy — CIO & Founder, Clime Asset Management
3.15pm: John Hewson — Former Liberal Party Leader, 1990-1994
3.30pm: Eli Greenblat — The Australian: Myer analysis
3.45pm: Nick Bishop — Head of Australian Fixed Income, Aberdeen Standard Investments
3.50pm: Michael McCarthy — Chief Markets Strategist, CMC Markets
4.00pm: Tony Farnham from Pattersons Securities guest hosts
4.05pm: Michael Heffernan — Senior Wealth Adviser and Economist, Phillip Capital
(All times in AEST)
2.32pm: New gravity to CBA allegations
Alleged failures to notify AUSTRAC of suspected terrorist financing through CBA accounts to Lebanon happened as late as August 2017, THIS YEAR, in new documents filed in the Federal Court. @SkyBusiness
— Leo Shanahan (@_leo_s) December 14, 2017
Austrac widens Commonwealth Bank money laundering case with new claims the nation’s largest bank failed to adequately monitor suspected terrorist financiers and alert them to authorities https://t.co/IhRxTGdGqi
— Michael Roddan (@MichaelRoddan) December 14, 2017
2.26pm: Parisian origins of $33bn Wesfield deal
Christine Lacy and Will Glasgow write:
Unibail-Rodamco’s Belgian-born boss Christophe Cuvillier will launch his courtship of the Australian market live from London tonight, as he seeks to gain shareholder approval of the European giant’s $33 billion bid for Sir Frank Lowy’s Westfield International.
As Culliver, 55, who lived in Sydney for three years from 1993 when he was working for L’Oreal, preps for his Q & A, details on how Australia’s biggest ever takeover was sealed are filtering down from the northern hemisphere.
While the companies have known each other for some time, the deal began in earnest only about six weeks ago.
Critical to its genesis and throughout was heavy hitter investment banker Robert Leitao, the UK-based global head of advisory at Rothschild and one of the firm’s managing partners, who has been a long-time, trusted adviser to Westfield and the billionaire Lowy family.
More to come from Margin Call
2.17pm: Westpac to refund customers $11m
Westpac will refund customers associated with 13,000 owner-occupied loans approximately $11 million after an ongoing internal review revealed a processing error.
The error led to additional repayments on the mortgages at interest-only rates after the principal and interest repayment period had commenced.
The bank says the error predominantly affects loans with an interest only period that expired between 2009 and 2016, while St. George, Bank of Melbourne, BankSA and RAMS customers are not affected.
“We apologise unreservedly for the error and have now automated the switching process to
ensure it does not happen again,” says Westpac’s consumer bank chief executive George Frazis.
“Importantly, customers don’t need to do anything. We are contacting customers proactively and will provide compensation to anyone who we believe has been financially disadvantaged.”
WBC last up 0.8 per cent on $31.68
1.56pm: Aussie bank hurdles nailed in: UBS
The outlook for Australian banks remains challenging and their share prices should keep lagging behind their global peers in 2018, according to UBS.
UBS analyst Jonathan Mott has cut his EPS forecasts by as much as 3 per cent for the major banks. He now expects a flat earnings outlook after predicting a slowdown in credit growth and higher credit loss forecasts.
“The banks have a challenging outlook as the housing market slows, net interest margins come under pressure from competition and switching from interest only to principal & interest loans, offsetting improved funding,’ Mott says.
“The Royal Commission is an area of material uncertainty, while mortgage mis-selling and responsible lending risks are a growing concern.”
He sees housing market headwinds from macroprudential tightening, APRA’s focus on lax mortgage underwriting standards — including excessive use of expense benchmarks and lack of knowledge of borrower’s total financial commitments, a 30 to 60 per cent step-up in mortgage repayments as borrowers reach the end of their interest only period, falling house prices in Sydney and peaking house prices in Melbourne.
“As a result we now anticipate a steady decline in mortgage funding (flow) over the next three years as well as an increase in the run-off/paydown rate as many borrowers’ ‘interest only’ period matures,” he says.
1.18pm: ASX holds gains, miners outperform
Local shares maintains gains in afternoon trade as BHP (+0.6pc), Westpac (+0.8pc) and Wesfarmers (+0.3pc) keep the bourse above its prior closing mark.
The S & P/ASX200 last traded 0.2 per cent higher on 6032.
Gold and industrial metal miners fill the top performers as US dollar weakness lifts the denomination of underlying commodities, strength typically associated with that in linked equities.
Myer continues to trade near the record low it hit at the open on a profit warning, Westfield trims back recent gains on a fresh $33bn takeover offer, while Wooloworths remains under pressure after the ACCC revealed its opposition to a proposed service station deal with BP.
Meanwhile, Caltex shares are up 4 per cent.
The Australian dollar trades around the day’s high of US76.75 cents it hit on stronger than expected job adds in November.
1.00pm: The Trading Day ahead
Join the conversation with our Trading Day experts for breaking news and analysis in financial markets here and on Sky News Business (Ch: 602)
NOW: Ben Le Brun — Charles Schwab
1.30pm: Evan Lucas — The Lucas Report
1.45pm: Dominiqu Perott — NSW Treasurer
1.50pm: Live cross — Bloomberg Asia
2.00pm: Tony Morris — Bank of America Merril Lynch
(All times in AEST)
Supratim Adhikari 12.52pm: Telstra splurges $50m on 5G
Telstra has picked up the lion’s share of the spectrum left over from the 2016 auction process, with the incumbent telco spending $72.5 million to reinforce its existing mobile network and get ready for 5G technology.
The telco has been particularly aggressive in picking up spectrum in the 3.4 MHz band, critical for 5G network deployment, spending $50m for lots in Brisbane. Optus and NBN Co have also focused primarily on the 5G spectrum — read more
TLS last down 0.3 per cent on $3.72
11.56pm: The Trading Day ahead
Join the conversation with our Trading Day experts for breaking news and analysis in financial markets here and on Sky News Business (Ch: 602)
12.00pm: Chris Conway — Australian Stock Report
12.15pm: Tony Boyadjian — Compass Global Markets
12.45pm: David De Garis — Director of Economics, NAB
1.00pm: Ben Le Brun — Charles Schwab
1.30pm: Evan Lucas — The Lucas Report
(All times in AEST)
11.48am: WATCH: John Durie on bank oligopoly
11.40am: DATA: Job adds surge past forecasts
Stronger than expected jobs data has pushed the Australian dollar up to US76.64 cents from US76.28 cents.
Employment rose 61,600 vs. 19,000 expected, while unemployment stayed at 5.4pc as expected.
Participation jumped from 65.1 to 65.5 per cent, holding the jobless rate down.
Importantly for the wages outlook, full time jobs rose 41,500 vs. 19,700 for part time jobs.
11.23am: AGL investment strategy uncertain: Citi
Citi has cut AGL to Neutral after its strategy day, warning that its growth pipeline will come with a higher capex bill, yet the associated earnings benefits lack clarity.
“We fail to see positive catalysts for AGL however, we can identify a greater number of headwinds inside to future earnings and investor sentiment,” Citi analyst James Byrne says.
“We suggest a more compelling entry point below 16x PE is required to compensate investors for uncertainty over delivery of the next leg of earnings growth, unless there are higher wholesale electricity prices.”
His target price is $26.31.
AGL last down 1.3pc at $24.95
11.15am: DATA: Jobless rate tipped steady
ABS employment data for November are due at 11.30am (AEDT).
Economists are expecting the jobless rate on hold at a 4-and-a-half year low of 5.4pc and a 19,000 rise, according to Bloomberg.
That follows last month’s report of a 3,700 rise in jobs and a 5.4pc jobless rate in October.
10.48am: Property ‘wealth’ spending RBA haunt: UBS
A weak outlook for consumption will keep interest rates lower for longer, according to UBS.
Whereas they previously expected rate hikes to start in the December quarter of 2018, UBS economists now expect the Fed to be on hold until 2019.
Amid a lagged impact of macroprudential tightening, they now see home loans falling in coming years, halving the rate of housing credit growth to about 3 per cent.
That’s expected to cause flat house price growth in 2018 before falling by as much as 3 per cent in 2019 — earlier this year it was growing at mid-double digit pace.
Thus a recent boost to consumption induced by the ‘household wealth effect’ is likely to fade.
“Despite booming jobs, wages are near record lows and cash flow has been crunched,” UBS economists George Tharenou and Carlos Cacho said ahead of November employment data to be released later today.
“While the ‘bulls & hawks’ on the economy often point to booming 3 per cent on year jobs growth — which saw the unemployment rate drop to a 5-year low of 5.4 per cent, we instead argue that the Phillips curve is broken given record low wages, which has finally led to a dovish shift by the RBA.
“Indeed, 2017 household cash flow was crunched to a record low 1.5 per cent by higher taxes, utilities and petrol, with no rate cuts to ease the debt burden.”
They have cut their outlook for real consumption to 2 per cent on year in 2018 and 2019, consensus estimates at 2.5 per cent, while our real GDP outlook of 2.7 per cent remains below consensus of 2.9 per cent.
10.22am: ASX lifts as Woolies pulls back
Australia’s S & P/ASX 200 is up 0.2 per cent on 6034 in early trade after futures and fair value indicated a 0.6pc rise, shy of a decade high at 6052.1 on a closing basis.
It follows gains on Wall Street in reaction to the “Goldilocks” combination of below consensus core US CPI and higher economic growth forecasts from the Fed, as well as no increase in its “dotplot” projections of the Fed funds rate.
Commodity prices were mostly positive with iron ore up 1.1pc to $US69.53 and LME copper up 1.1pc, though Brent crude fell 1pc to $US62.69.
The main news today is the profit warning from Myer that has sunk shares to a new record low and the ACCC’s decision to block BP’s purchase of Woolworths’ service stations — WOW shares down 1 per cent in early trade.
There have also been a number of upgraders in the resources sector from Morgan Stanley and Shaw has upgraded ANZ.
Index last 6025.6
10.05am: Myer shares hit record low
Myer shares hit a new record low of 63.5 cents at the open on a 12 per cent fall after the department store warned sales in the first two weeks of December have fallen 5 per cent on the same period a year earlier, offering no support to a first-half FY18 profit now expected to be “materially” below that recorded in FY17.
MYR last down 7.6 per cent on 67 cents.
9.57am: Myer implies 10pc profit fall
Myer shares should drop to a fresh record low below the September trough at 68 cents after its profit warning today.
Trading in the past two weeks has been significantly below MYR’s expectations and it’s unsure if the extra-weekend of pre-Christmas trading will help.
“Despite investing heavily in marketing and traffic-driving initiatives, total sales to the end of November were down 2.3pc and down 1.8pc on a comparable store sales basis,” the company said.
“Sales during the first two weeks in December have weakened further and were down 5pc on the previous corresponding period.”
It now expects underlying 1H2018 NPAT to be “materially” below the previous corresponding period, implying that it will be at least 10 per cent worse.
While analysts have warned of a weak Christmas for retailers, the sideways performance of MYR shares since September suggests this isn’t yet factored in.
MYR last 72.5 cents
9.48am: ASX set to open solidly higher
The Australian share market looks set to open more than a third of a per cent higher after the Federal Reserve’s interest rate rise buoyed Wall Street stocks.
At 7.59am (AEDT), the share price futures index was up 0.4 per cent at 6,062.
In the US, the Federal Reserve raised its benchmark overnight lending interest rates by a quarter percentage point, as anticipated, but left its rate outlook for the coming years unchanged even as policymakers projected a short-term acceleration in US economic growth.
The move helped boost equity markets but the US dollar lost ground.
In late US afternoon trade (7.30am AEDT), the Dow Jones Industrial Average was up 0.41 per cent, the S & P 500 had gained 0.19 per cent and the Nasdaq Composite had added 0.33 per cent.
Locally, in economic news today, the Australian Bureau of Statistics is due to release November labour force data.
Meanwhile, Commonwealth Bank of Australia shares will be a key focus for investors as the big lender late Wednesday admitted to a significant number of the breaches of anti-money laundering and counter-terrorism financing laws.
The Australian market yesterday edged higher as the property sector was boosted by the $33 billion takeover of Westfield, and the consumer staples sector also rose.
The benchmark S & P/ASX200 index gained 8.6 points, or 0.14 per cent, at 6,021.8 points.
The broader All Ordinaries index rose 10 points, or 0.16 per cent, to 6,103.1 points.
AAP
9.32am: Myer woes leak into December
Department store Myer has warned first-quarter performance has been subdued, in particular sales and profit have deteriorated in recent weeks and that the “recent trading environment” is expected to result in an unrecoverable first-half profit shortfall.
Total first-half sales fell 2.8 per cent, or 2.1 per cent on a comparable store basis, while sales in the first two week of December fell 5 per cent on the same period a year prior.
Reduced foot traffic continues to impact the business, according to the company.
Myer says its ‘New Myer’ strategy is centred on a five-year turnaround and management remain focused on executing the long-term transformation.
MYR last 72 cents
9.19am: ACCC opposes BP-Woolies deal
The Australian Consumer and Competition Comission has opposed UK petrol giant BP’s proposed acquisition of various Woolworth’s service stations across the country.
Woolworths currently operates 531 sites and has 12 sites in development. BP supplies fuel
to approximately 1,400 BP-branded service stations throughout Australia, setting fuel prices
at roughly 350 of them.
“We consider that BP acquiring Woolworths’ service stations will be likely to substantially
lessen competition in the retail supply of fuel,” ACCC Chairman Rod Sims said.
The regulator cites grounds for concen due to Woolworths’ standing as a “vigorous and effective” competitor to BP, the latter prone to increase prices relatively more quickly during a price up-cycle and decrease them relatively slower in the opposite phase.
WOW last $27.05
9.14am: Analyst rating changes
ANZ Bank raised to Buy — Shaw & Partners
Centuria raised to Buy — Shaw & Partners
South32 raised to Overweight — Morgan Stanley
OZ Minerals raised to Overweight — Morgan Stanley
Independence Group cut to Equalweight — Morgan Stanley
Alumina raised to Equalweight — Morgan Stanley
Aristocrat started at Add; $27.22 target price — Morgans Financial
Cleanaway cut to Hold — Morgans Financial
Silver Chef cut to Hold — Morgans Financial
Fortescue raised to Buy — UBS (headlined yesterday)
Whitehaven raised to Buy — UBS (headlined yesterday)
Westfield cut to Hold — Morningstar
AGL cut to Neutral — Citi
9.07am: Origin pledges to halve carbon emissions
Origin Energy has pledged to halve in absolute scope 1 and 2 carbon emissions company-wide by 2023.
Origin has also committed to a 25 per cent reduction in value chain scope 3 emissions on
2017 levels over the same period.
“We want to be leading the transition to a cleaner and smarter energy future and we are proud to now have a tangible commitment for emissions reduction across our business,” said Origin chief executive Frank Calabria.
ORG last $9.27
9.02am: WATCH: Ticky talks Austrac’s CBA case
.@_leo_s joins Ticky to discuss the CBA filing its defence against Austrac. #ticky pic.twitter.com/O29W6ONTFJ
— Sky News Business (@SkyBusiness) December 13, 2017
Michael Roddan 8.48am: Austrac adds to CBA ‘failures’
Anti-money-laundering agency Austrac will today hit the Commonwealth Bank with a further 100 allegations of serious failures to report suspicious transactions, after alleging in August that the bank had broken the law on more than 53,000 occasions.
Lawyers for Austrac were last night putting the final touches on an amended statement of claim against the nation’s largest bank, which will be filed in the Federal Court early today — read more
CBA last $80.31
8.32am: Wall St records on Fed, tax passage
The Dow finished at another record Wednesday as the Federal Reserve lifted interest rates and a major US tax cut bill in Congress moved closer to the finish line.
At the closing bell, the Dow Jones Industrial Average was at 24,591.91, up 0.4 per cent, its fourth straight record close.
The broadbased S & P 500 finished slightly lower at 2,663.48, while the tech-rich Nasdaq Composite Index rose 0.2 per cent to 6,878.25.
AFP
Matt Chambers 8.28am: Vesey doubles down on Liddell
AGL Energy chief Andy Vesey says plans released to replace the Liddell coal-fired power station in the Hunter Valley have delivered what Malcolm Turnbull called for, declaring similar schemes are likely to replace the nation’s ageing coal-fired power station fleet.
But he says part of the Liddell replacement plan — building the world’s biggest battery — is not yet economic and will require further advances in technology to be part of the solution of providing reliable power to replace the Hunter Valley power station in 2022 — read more
AGL last $25.29
Andrew White 8.23am: NAB rules out new coal ventures
National Australia Bank will not finance new thermal coal mine developments under a policy that restricts lending to existing clients and projects that are already operating.
In a hardening of policy at the country’s leading business bank, NAB is set to announce that it will only reconsider if carbon reduction technologies such as carbon capture and storage prove commercially viable — read more
NAB last $29.95
Damon Kitney 8.06am: Red leader lands in a2 paddock
Jayne Hrdlicka, the boss of Qantas’s (QAN) loyalty division and the former chief executive of its budget carrier Jetstar, has made a stunning departure from the airline, landing the job of chief executive of sharemarket high-flyer a2 Milk.
A2 (A2M) announced to the New Zealand Stock Exchange this morning that Ms Hrdlicka will take over from current CEO Geoff Babidge, who will retire from his role during 2018 after seven years as CEO and 10 years leading the firm’s Australian business.
7.20am: Aussie rises against greenback
The Australian dollar is almost half a US cent higher against the greenback, which has weakened after the Federal Reserve raised its interest rate, as expected, but left its outlook unchanged.
At 6.35am, (AEDT), the Australian dollar was worth US76.22 cents, up from US75.75 cents yesterday.
The US central bank forecast three rate rises in each of 2018 and 2019 to reach a long-run level of 2.8 per cent — the same that it projected in September. “The downward move in the (US) dollar is interesting and notable in the sense that the only dovish thing I see in this meeting is the two dissents,” Reuters quoted Erik Nelson, a currency strategist at Wells Fargo in New York as saying. “Maybe only one was expected.”
The two dissenters, Chicago Fed president Charles Evans and Minneapolis Fed president Neel Kashkari, disagreed with the rate rise decision, according to the Fed’s policy statement on Wednesday.
The US dollar index against a basket of six major currencies dropped as low as 93.596, the lowest level since Dececember 7, before rising back to 93.683, down 0.44 per cent on the day.
The greenback had weakened earlier after core consumer price data showed slowing inflation, raising concerns the Fed would be less able to execute multiple rate increases next year.
The key local event risk for Thursday is the Australian Bureau of Statistics labour force figures due out at 11l30am (AEDT).
Meanwhile, the Aussie dollar is also higher against the yen and the euro.
AAP
6.45am: US stocks extend gains after Fed
US stocks extended gains after the Federal Reserve raised short-term interest rates for the third time this year and said it remains on track to chart a similar course next year.
The Dow Jones Industrial Average added 124 points, or 0.5 per cent, to 24,629, following a fourth straight day of gains. The S & P 500 rose 0.2 per cent and the Nasdaq Composite climbed 0.3 per cent.
Australian stocks are tipped to rise strongly at the open. At 6.55am (AEDT) the SPI futures index was up 36 points.
The Fed’s rate increase was widely expected, with some investors and analysts watching for its economic growth and interest-rate projections for next year.
The central bank stuck to its forecast for three more increases in 2018, and revised upward its economic growth projection, a positive for stocks, according to Nathan Thooft, senior managing director of global asset allocation at Manulife Asset Management.
Some analysts had been concerned that a faster-than-expected pace of rate increases could rattle markets.
Investors have said recently that the earnings and economic backdrop remains favourable for stocks moving forward. The S & P 500 has risen to fresh records after posting its longest losing streak since March last week.
“The buy-the-dip mentality is still working,” said Rob Bernstone, a managing director in equity trading at Credit Suisse Group AG. “We’ll see if anything changes that.”
Treasury yields and the dollar extended losses following the Fed’s decision. They fell earlier in the session after data revealed US consumer prices rose in November, propelled by a rise in energy prices, but underlying inflation pressures showed signs of moderation.
The WSJ Dollar Index, which tracks the dollar against a basket of 16 others, declined 0.5 per cent. The yield on the 10-year US Treasury note fell to 2.369 per cent, according to Tradeweb, from 2.403 per cent yesterday.
Dow Jones
6.30am: US Fed raises rates
The US central bank raised the benchmark interest rate for the third and final time this year, and officials indicated they are not likely to be more aggressive next year, at least for now.
The Fed’s policy-setting Federal Open Market Committee increased the key lending rate to 1.25-1.5 per cent, an increase of a quarter point.
But the quarterly forecasts by Fed officials showed no change in the expectations for 2018 and 2019, with three rate hikes expected next year and one in the following year, identical to their September projections — read more
AFP
6.20am: European stocks down
European stock markets closed mostly lower ahead of the US Fed rate call, and as investors also looked ahead to central bank policy announcements due tomorrow from both the European Central Bank and the Bank of England.
London was down 0.1 per cent, Paris closed 0.5 per cent lower and Frankfurt ended down 0.4 per cent
Elsewhere, bitcoin retreated to well below $US16,000 from around $US17,250, according to Bloomberg, following this month’s stratospheric rise to multiple records.
However, while there are warnings of a massive bubble bursting, some analysts say the digital unit could continue to rally, having already increased 20-fold this year.
“Bitcoin has fixed supply and growing demand,” noted Greg McKenna, market strategist at AxiTrader.
“Think of it less as a currency and more as a stock which has a fixed supply of shares on issue and increasing demand. What happens then? Prices rise.”
AFP
May rate cut ‘locked in’; ASX plots strong finish before Anzac Day break
Westpac's Luci Ellis predicts rate cuts in May, Aug, Nov. Miners lead local gains. Mixed Asian markets reflect Trump trade uncertainty amid softening stance on China.
ASX 200 mostly erases April tariff losses; gold miners dive
Trade deals optimism rises as US President Donald Trump softens stance on China, Fed chair Jerome Powell. Paladin top gainer. Safe-haven gold pulls back from its record high.