The ASX200 is up 18 points despite some big falls in Materials. Inflation data the focus at 11:30am. BLD trading downdate (the bad version of an update), FMG and RSG lower after Qs, MYR looks “interesting” on the weekly chart and AMP could lose Aussie Post default super. #ausbiz



  • It’s “Inflation” day – Lots riding on the number and what it will mean for future RBA moves. Expectations are for the annual rate to tick up to 2.0%.


  • Fortescue Metals Group (FMG) – Q report
  • AGMs – Iluka (ILU) and Oz Mineral (OZL)
  • Ex-dividend – Ellerston Global Investments (EGI) 2.5c
  • Japanese data – All Industry Activity Index, Leading Economic Index (Final). Coincident Index (Final)


  • UK – Public Sector Net Borrowing. CBI Business Optimism Index, CBI Industrial Trends Orders
  • US earnings – Caterpillar (CAT), Coca-Cola (KO), Freeport-McMoRan, Harley-Davidson (HOG), Lockheed Martin (LMT), Verizon (VZ), After The Close – Carlisle Cos (CSL), Chubb (CB), Cree (CREE), Texas Instruments (TXN)
  • US economic data – FHFA Housing Price Index, S&P Case-Shiller Home Price Index, New Home Sales, Consumer Confidence


  • Bank Royal Commission – Continues. Expect more news about financial adviser doing the wrong thing and their employers doing worse. NAB on now in relation to forging documents and witnessing issues. .
  • Fortescue Metals group (FMG) – Iron ore shipments of 38.7mt and cash production costs (C1) of US$13.14 per wet metric tonne (wmt). Year to date C1 costs are US$12.43/wmt, equivalent to a C1 cost of US$11.90/wmt after normalising for an assumed exchange rate of US$0.75 and fuel costs of US$53 per barrel (WTI)


  • Resolute Gold (RSG) – Quarterly report. Soft result.
  • Beach Energy (BPT) – Quarterly report. Consolidation of Lattice financial results from 1 January 2018. Tightened FY18 pro forma1 production guidance to 26.0 – 27.0 MMboe (previously 25.5 –27.6 MMboe). Reduced and tightened FY18 pro forma capital expenditure guidance to $370 – 400 million (previously $405 – 455 million).
  • Blackmores (BKL) Q update. Net sales for the nine months to 31 March up 8.5% to $434m. Net profit after tax up 19.3% to $52m. Acquisition of 100% of the world-class Catalent Australia tablet and soft-gel capsule manufacturing facility in Braeside, Victoria for $43.2 million, delivering increased agility to respond to changing market conditions. The acquisition will support the Group’s future growth and product innovation with strong research and development capabilities and provide greater control over production. Jackie McArthur appointed to the Board as Non-Executive Director, with extensive operational expertise across the Asia Pacific region.
  • Vocus Communication (VOC) – Will retain the Vocus New Zealand business. VOC received multiple offers but none “reflected the fundamental and strategic value of Vocus NZ nor provided sufficient certainty of funding and execution.” Update on debt refinancing. Will amend its debt covenants by extending the ‘surge limit’ relating to its Net Leverage Ratio cap of 3.5x. The ratio will drop to 3.0x from the 30 June 19 testing date.
  • Macquarie Atlas Roads (MQA) – 1Q Toll Statistics – Weighted average toll revenue and traffic for the March 2018 quarter1 increased by 5.4% and 3.4% respectively reflecting increased aggregate traffic levels, primarily at APRR, and revised toll schedules implemented over the past 12 months. As previously foreshadowed, the timing of holiday periods during the March 2018 quarter compared to pcp was overall favourable for APRR’s traffic performance, but adversely impacted traffic levels at the Dulles Greenway.
  • G8 Education (GEM) – New General Counsel and Company Secretary Tracey Wood
  • Boral (BLD) – Trading update. BLD has sold its Prospect Masonry property (at Clunies Ross Street, Greystanes in New South Wales) to ISPT Pty Ltd. It will contribute approximately $56 million of EBITDA in FY2018 and BLD now expects a total EBITDA $55-65m contribution from Property in FY2018. This has resulted in a revised divisional outlook for Boral Australia and Boral North America. Australia – earnings growth up 10-20% in FY2018 compared with FY2017, on both an EBITDA and EBIT basis. Earnings in Boral Australia were lower than expected in the March quarter due to an unscheduled kiln outage at Berrima, continued challenging conditions in Western Australia, and a rain impacted Queensland market. However, a strong June 2018 quarter is expected from Boral Australia, especially if favourable weather conditions occur as they did in the June 2017 quarter. North America – Earnings growth in the second half of around 10-25% compared to the first half result, on both an EBITDA and EBIT basis. March quarter earnings for Boral North America were below expectations. Significant rain in the Texas region and up through the Midwest, particularly in February, together with prolonged winter weather relative to the prior year when the spring recovery came early, had an adverse impact during the period. Operational issues reported in the first half are being resolved, although consolidation of production lines in the Oceanside metal roofing business in California are still being addressed and commissioning costs associated with the Greencastle stone plant continued to impact up until the end of March. In the Fly Ash business, higher costs associated with repositioning fly ash supply to customers due to the closure of the three utilities in Texas are having a short-term impact. With historically more favourable weather in the June quarter, coupled with pent up demand, synergy delivery and improving operational performance. “The benefits of higher property earnings, including a lower effective tax rate for FY2018 which is now projected to be around 19-22%, more than offsets the impact of lower expected earnings from Boral North America on Boral’s Group NPATA”
  • Iluka (ILU) – Class action update. ILU has received notice of a class action relating to alleged breaches of its continuous disclosure obligations and misleading and deceptive conduct in relation to disclosures Iluka made to the market between the period April to July 2012


  • CYBC (CYB $5.41) – Citi has upgraded to a Neutral (from Sell) recommendation with a target price of GBP3. The analyst believes the 13% share price fall ytd makes the risk more balanced. They are closely watching NIM and expect downward pressure, but think cost savings might provide compensation and that there’s ongoing potential for capital return,
  • Santos (STO $6.01) – Credit Suisse has an Outperform recommendation with a target price of $6.35. The softer production report didn’t surprise the news CS analyst (due to earthquake and lower Fairview volumes). Guidance has been lowered to 55-58 mmboe. Yesterday’s speculation that Total and Quadrant may be looking at the business adds a bit more excitement.


  • Myer (MYR 38c) – Macquarie has a Neutral recommendation with a target price of 50c. While happy that a new CEO (John King from House of Fraser) has been appointed, the analyst thinks financial capacity limits the investment and turnaround possibilities. While I wouldn’t be interested in this business from a fundamental perspective, technically it lokks interesting with the RSI  (red line) breaking up above 30 (the heavily oversold level), MACD histogram (the blue bars) moving from negative to positive and share price moving away from the lower Bollinger Band (the grey lines around the price candles)…These are all technical BUY signals. The new CEO may just be the catalyst to spark a share price rally…


  • Healthscope (HSO $2.03) – Morgan Stanley has an Underweight recommendation with a target price of $1.67. ISU has confirmed that the negative trend in health insurance leads has accelerated. Leads declined by 11% in the last two weeks of March, usually the strongest period, and by 21% in the first three weeks of April. The analyst notes the ongoing risk to private hospital volume recovery.





US EQUITIES – S&P500 +0 (+0.01%), Dow Jones -14 (-0.06%), Nasdaq -18 (-0.25%).

Main themes –

Volume was light ahead of the biggest week for corporate earnings (170 companies to report).

Treasury yields continued to rise; the 10yr approached 3.0% (touching 2.99%) for first time in over four years

The US dollar also continued to climb

EUROPEAN MARKETS – All higher. STOXX 600 +0.35%, UK FTSE +0.42%, French CAC +0.48%, German DAX +0.25%,


  • The US dollar was up 0.7% at 90.94. It has gained 1.7% over the last 5 days.
  • The Aussie dollar is again significantly weaker, currently trading at US76.07.

BONDS – 2-yr: +3 bps to 2.47%, 5-yr: +3 bps to 2.82%, 10-yr: +2 bps to 2.97%, 30-yr: UNCH at 3.14%


  • WTI oil futures closed up 24c at US$68.64, a new 3-year high. Iran’s oil minister said OPEC will not have to extend a deal to limit output with other oil-producing nations if crude prices keep rising.
  • Gold futures closed down 0.92% at US$1,326 as bond yields rose
  • Iron ore was unchanged at US$68.50
  • LME metals saw a big correction – Copper -0.69%, nickel -3.81%, aluminium -7.05% after the US gave American customers of Russia’s biggest aluminum producer Rusal more time to comply with sanctions. This also eased fears Washington might target palladium producer Nornickel.


  • US earnings – Bank of Hawaii (+0.19%), Halliburton (+0.17%), Hasbro (+4.00%), InSteel Industries (-0.19%), Kimberly-Clark (-1.51%), Philips (+4.31%). After The Close – Alphabet (-0.06%),
  • US economic data – March Existing Home Sales (actual 5.60 million; Briefing.com consensus 5.57 million; prior 5.54 million)
  • ECB – Reports it will shelve a plan that would have required banks to increase their provisions for bad loans
  • European data – Eurozone April Manufacturing PMI 56.0 (expected 56.6; last 56.6) and Services PMI 55.0 (expected 54.8; last 54.9); German April Manufacturing PMI 58.1 (expected 57.6; last 58.2) and Services PMI 54.1 (expected 53.9; last 53.9); French April Manufacturing PMI 53.4, as expected (last 53.7) and Services PMI 57.4 (expected 56.6; last 56.9)


“I would like to say to people, open your eyes and find beauty where you normally don’t expect it.” – Jean Paul Gaultier, French designer born this day in 1952. Selfie in vintage 1996 (read bargain second-hand from@Paris_99 ‘cos I am VERY careful with money) JPG leather and velvet


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