The ASX 200 is down 16 points in mid morning trade, despite positive leads from US markets overnight, on after-market tariff turmoil. A_RIETS  the only +ve sector. Consumer stocks lower. MYR speculation on DJs bid. #ausbiz


  • Ex-dividend – Aberdeen Leaders (ALR) 1.3c, Cyclopharm Limited (CYC) 0.5c
  • Economic data – New vehicle sales. TD inflation guage


  • US economic data – It’s all about payrolls. Expectations are for around 195K new jobs to be added, but the risk is to the upside after stronger ADP numbers on Wednesday. However the key focus will be the growth in average earnings, which is expected to come in at 0.2% for March or 2.7% annual growth, up from 2.6% in February.



  • David Jones said to be considering a takeover of Myer (MYR)
  • Scentre Group (SCG)- Has priced €500 million of 10-year fixed rate guaranteed notes with a coupon of 1.75% under its Euro Medium Term Note Programme. Proceeds will be used to repay borrowings under the Group’s revolving credit facilities and for general corporate purposes.
  • Nanosonics (NAN) – Yesterday the German Society of Ultrasound in Medicine (DEGUM) has published comprehensive recommendations for infection prevention in ultrasound and endoscopic ultrasound. The new DEGUM guidelines state that all semi-critical ultrasound probes need to undergo disinfection with disinfectants that are proven bactericidal (including mycobacteria), fungicidal and importantly, virucidal. The trophon® EPR device has been shown to meet all these requirements. NAN said, amongst other things, that “As a result of the strengthening fundamentals for adoption of our trophon system, Nanosonics is now growing its direct sales and service infrastructure in Germany, in addition to those being made in the UK this half”


  • ANZ ($26.81) – Citi has upgraded to a Buy (from Hold) recommendation with a target price of $30. This upgrade is largely related to the 6% fall in the share price in the year to date. The analyst thinks ANZ, in particular, will be able to shift its dividend pay-out higher, to 80% by the second half of 2020 from the current 65%. The CET1 ratio is forecast to remain above the 10.5% target despite around $7bn in share buybacks.


  • AMP ($4.90) – Credit Suisse has an Outperform recommendation with a target price of $5.45 (from $5.60). The analyst has made adjustments to earnings forecasts to take account of investment market movements in the March quarter. The FY18 underlying profit estimates has been cut by 1.4% and outer years by 1.7%. The profit estimate for FY18 is revised down -5.5%.


  • AP Eagers (APE $8.60) – Morgan Stanley has upgraded to an Equal-weight (from Underweight) recommendation with a target price of $8.50 (from $6.85). New car sales growth has improved and regulatory headwinds have been factored into the stock. The valuation prevents a more positive view. The analyst sees upside relative to FY17 on the removal of trading losses at sold dealerships, while the impact from regulatory changes has largely passed.


  • Afterpay (APT) – Morgans has initiated coverage with a Hold recommendation with a target price of $6.34. The analyst thinks the business model is attractive, given scalability and capital efficiency. A short-term repayment cycle helps reduce risks. They expect operating leverage to rise substantially in future. On the downside, they think regulatory risks are hard to fully dismiss, with an uptick in the bad debts cycle potentially a longer-term headwind.


  • CYBG PLC (CYB $5.38) – Macquarie has upgraded to an Outperform (from Neutral) recommendation with a target price of $6.50 (from $5.27). The analyst expects improving profitability through efficiencies, market share gains, capital returns and, eventually, higher interest rates. While some factors will take time and indeed benefit all UK banks, the broker sees CYBG as a greater net beneficiary. The undemanding valuation warrants an upgrade.
  • Insurance Australia Group (IAG $7.58) – Credit Suisse has a Neutral recommendation with a target price of $7.50. The analyst has adjusted earnings forecasts to allow for unfavourable investment market movements in the March quarter. It has resulted the FY18 net profit estimate being cut by 5.2%.


  • Nanosonics (NAN) – Morgans has an Add recommendation with a target price of $3.13 (from $3.22). The analyst thinks the new guidelines published by the German Society of Ultrasound in Medicine should help the uptake of Trophon in this market. They’ve make some downward revisions to near-term forecasts to reflect the transition to a more direct sales channel. Near-term net profit forecasts are reduced by 47% for FY18 and 26% for FY19.




SPI FUTURES +18 but an after-market announcement about additional tariffs likely to derail the positive start.

US EQUITIES – S&P500 +18 (+0.69%), Dow Jones +241 (+0.99%), Nasdaq +34 (+0.49%).

Main themes –

  • Tariff concerns continued to ease as China and the US looked to be willing to negotiate.
  • But… after-market there were reports that Trump has just asked US trade representatives to consider an additional $100bn in additional tariffs on Chinese products.
  • Tech stocks underperformed as a sector but Amazon +2.92% and facebook +2.73% did see a rebound. facebook CEO Mark Zuckerberg told reporters he has not seen a noticeable change in user behaviour following the Cambridge Analytica data scandal.

EUROPEAN MARKETS – All significantly higher. STOXX 600 +2.40%, UK FTSE +2.35%, German DAX +2.90%, French CAC +2.62%.


  • The US dollar was up another 0.34% to 90.45.
  • The Aussie dollar is little changed at US76.86.

BONDS –     2-yr: +2 bps to 2.30%, 5-yr: +3 bps to 2.64%, 10-yr: +4 bps to 2.83%, 30-yr: +4 bps to 3.07%


  • WTI oil closed up US17c at US$63.53 on mixed factors including technical support and strength in equity markets
  • Gold futures fell 0.9% to US$1,328.50.
  • Iron ore was unchanged at US$65.00
  • LME metals were mostly stronger – Copper +1.37%, nickel +1.33%, aluminium +0.90%


  • US economic data – February Trade Balance -$57.6bn (consensus -$56.7bn; prior -$56.7bn), weekly Initial Claims 242K (consensus 225K; prior 218K), and Continuing Claims 1808K (1872K)
  • Trade – Trump’s economic adviser tried to ease tariff war concerns by saying the current announcements by the two countries mere opening proposals and suggested the US tariffs may never go into effect, while China’s ambassador in Washington said Beijing’s preference was to resolve the dispute through talks.
  • European data – Eurozone February PPI +0.1% (expected 0.0%; last 0.4%) and +1.6%yoy (consensus 1.5%; last 1.6%). February Retail Sales +0.1% (expected 0.6%; last -0.3%) to be +1.8% year-over-year (consensus 2.1%; last 1.5%). March Services PMI 54.9 (expected 55.0; last 55.0); German March Services PMI 53.9 (expected 54.2; last 54.2). February Factory Orders +0.3% (expected 1.6%; last -3.5%); French March Services PMI 56.9 (expected 56.8; last 56.8)
  • UK March Services PMI 51.7 (expected 53.9; last 54.5)



“Everyone’s had an interesting life. Unless they’re interested in business or something.” – Leonora Carrington, British artist born this day in 1917. Died 25 May 2011


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