The ASX200 is down 34 points in mid-morning trade, after volatility in global markets on trade conflict escalation. Healthcare the only +ve sector after ISU +28.0% confirms takeover approaches. ANZ on cartel charges and MND downgraded. House price first annual decline since 2012 #ausbiz


  • Economic data – AIG Manufacturing Index, HIA New Home Sales, Retail Sales, CoreLogic House prices
  • OceanaGold (OGC) – AGM
  • Ex-dividend – Eclipx Group (ECX) 8.0c, Evans Dixon (ED1) 5.0c
  • Chinese – Caixin Manufacturing
  • Japanese data – Capital Spending, Nikkei Manufacturing PMI Final, Markit Manufacturing PMI Final


  • US data – Nonfarm Payrolls, Unemployment Rate, Avg. Hourly Earnings, Average Workweek, ISM Index, Construction Spending, Markit/CIPS Manufacturing PMI, Expectations are for 188K new jobs in the month, up from 178K last month. The ADP employment numbers (a private sector calculated estimate) came in at 178K, below the consensus estimate of 190K.
  • Fed Speak – Dallas Fed President (non-voter) Robert Kaplan, Minneapolis Fed President (non-voter) Neel Kashkari


  • ANZ – The Commonwealth Director of Public Prosecutions (CDPP) will commence proceedings against ANZ for being knowingly concerned in alleged cartel conduct by the joint lead managers of ANZ’s underwritten Institutional Equity Placement of approximately 80.8m shares in August 2015. ANZ understands the CDPP also intends to bring proceedings against ANZ Group Treasurer Rick Moscati. ANZ will defend the charges. ANZ is also co-operating with an investigation by ASIC in relation to the placement and disclosures made at that time.
  • iSelect (ISU) – ISU has noted the 12.21% interest held by IHA Group and media of corporate interest. ISU confirms that it has received several unsolicited and non-binding proposals from both listed and unlisted parties in relation to mergers and change of control transactions, over the last few weeks. The Board is currently reviewing these approaches and assessing their merit.
  • REA Group (REA) – Has completed the acquisition of Hometrack Pty Ltd.
  • Dexus (DXS) – Has sold its remaining 0% interest in the Southgate complex.
  • Tassal Group (TGR) and Ridley Corp (RIC) – RIC has agreed with Tasmania’s largest salmon producer Tassal Group Limited to conduct two salmon trials as part of Tassal’s research and development program.
  • Corelogic House Prices – National dwelling prices down 0.1% for the month and 0.4% for the year, the first annual decline since 2012. It’s the 8th consecutive month of falls. Losses were concentrated in Melbourne and Sydney, while Perth prices fell further and Hobart saw 0.8% growth in the month, and 12.7% over the year.



  • Commonwealth Bank (CBA $69.30) – Morgan Stanley has an Underweight recommendation with a target price of $70.00. The analyst points to slowing growth in mortgages and they see downside risk for growth forecasts. They also see tighter landing standards have increased competition and margin pressure. Shares have broken the horizontal support at $70


  • Domino’s Pizza (DMP $49.23) – Macquarie has upgraded to an Outperform (from Neutral) recommendation with a target price of $55.00 (from $45.00). The analyst sees lower downside risk in Australia as less than previously, while upside in Europe is higher, with potential for scale benefits. The 20% growth guidance is a stretch, but they see lower headwinds and support from the upcoming World Cup. Shares are on the verge of breaking through a downtrend in place since august 2016. While RSI is approaching oversold levels, a break of the downtrend resistance line could be considered a buy signal.


  • Monadelphous (MND $14.51) – Macquarie has downgraded to a Neutral (from Outperform) recommendation with a target price of with a target price of $15.87 (from $19.18). The analyst points to the low level of “wins” this year and the time lag for new work to flow through to revenue. With major contracts running off, they note $300m in revenue needs to be replaced in FY19. After a break of the uptrend, this were looking a bit more positive technically but this is a watch and monitor for now. MND is a quality company and signals for the industry overall are showing improvement, but there is no sing there yet.


  • Myob (MYO $2.81) – Has cancelled plans to acquire Reckon’s (RKN) accounting assets. Credit Suisse has downgraded to a Neutral (from OutperofrmOutperform) recommendation with a target price of $3.00 (from $3.75). The analyst has cut earnings forecasts by 15% on the decision. MYO has just given a MACD sell signal and RSI is also approaching oversold levels. Shares remain in linger term and short term downtrends with no signs to buy.





US EQUITIES – S&P500 -19 (-0.69%), Dow Jones -252 (-1.02%), Nasdaq -20 (-0.27%).

Main themes

  • Trade concerns – Steel and aluminum tariff exemptions for Canada, Mexico, and European Union will be allowed to expire. Effectively puts a 25% tarrif on steel tariff and 10% on aluminium. Strong response from Canadian Prime Minister Justin Trudeau and EU Commission President Juncker
  • Italian crisis averted with government formed
  • Caution ahead of jobs numbers

EUROPEAN MARKETS – Mostly lower. STOXX 600 -0.63%, German DAX -1.40%, French CAC -0.53% Italian MIB was ok -0.06% and the Greek market was up +0.88%


  • The US dollar was down 0.2% at 93.99.
  • The Aussie dollar is a little weaker at US75.67c.

BONDS – 2-yr: -1 bp to 2.41%, 5-yr: -1 bp to 2.66%, 10-yr: -2 bps to 2.82%, 30-yr: -3 bps to 2.99%.


  • WTI oil futures closed down $1.17 or 1.7% to US$67.04. EIA inventories fell by 3.6mb in the week much more than the 525,000b decrease expected.
  • Gold futures were fell US$1.80 or 0.1% to US$1304.70.
  • Iron Ore – IRESS reports iron ore unchanged at US$65.00 a tonne. The CommSec site says China Import (Fines 62% Fe) was up US30c to US$64.30/dry ton. (CFR Tianjin port)
  • LME metals – Mostly stronger. Cu +0.18%, Ni +0.59%, Al +0.97%, Zn -0.96% the exception


  • US economic data – Personal Income 0.3% (consensus 0.3%; prior 0.2%), Personal Spending 0.6% (consensus 0.3%; prior 0.5%), PCE Prices 0.2% (consensus 0.2%; prior 0.0%), PCE Prices – Core 0.2% (consensus 0.1%; prior 0.2%); Weekly Initial Claims 221K (consensus 227K; prior 234K) and Continuing Claims 1726K (prior 1741K); Chicago PMI (actual 62.7; Briefing.com consensus 57.9; prior 57.6); Pending Home Sales -1.3% (consensus 0.7%; prior 0.6%)
  • Deutsche Bank – Fell 7.15% on reports that the Fed put Deutsche Bank on a list of troubled banks a year ago. The event is not new, but was considered significant considering the International Monetary Fund called Deutsche Bank the riskiest financial institution in the world in 2016
  • European data – Unemployment Rate 8.5% (expected 8.4%; last 8.6%). May CPI +1.9%yoy (expected 1.6%; last 1.2%) and core CPI +1.1%yoy (expected 1.0%; last 0.7%); French CPI +0.4% (expected 0.2%; last 0.2%) to be +2.0%yoy (last 1.6%). Italian CPI +0.4% (expected 0.2%; last 0.3%) to be +1.1%yoy (expected 0.8%; last 0.5%). April Unemployment Rate 11.2% (expected 10.9%; last 11.1%); Spanish Q1 GDP +0.7% (as expected, last 0.7%) to be +3.0%yoy (expected 2.9%; last 3.1%)
  • UK data – Mortgage Lending £3.89bn (expected £3.80bn; last £3.96bn). April Mortgage Approvals 62,460 (expected 63,000; last 62,800). BoE Consumer Credit £1.83bn (expected £1.30bn; last £425m). May Nationwide HPI -0.2% (expected 0.3%; last 0.1%) to be +2.4%yoy (expected 3.0%; last 2.6%)
  • Italian politics – taly’s Movimento 5 Stelle and Lega have formed a government led by Giuseppe Conte. Euroskeptic Paolo Savona will be minister for European affairs while Giovanni Tria, who has also argued for the ability to print a parallel currency, would be named finance minister.
  • India – Q4 GDP +7.7%yoy (expected 7.3%; last 7.0%). April Infrastructure Output +4.7%yoy (last 4.4%)
  • Chinese data yesterday was very strong and better than expected.


  • Australian CAPEX data was also a big miss. Expectations for GDP 0.6%/2.5%.



“At the time my dog had a fungus on her chest that wouldn’t heal and resisted treatment. I made an ointment with our product and it cleared up in two days. She lived to 17 years.” – William Standish Knowles, American scientist and Nobel Prize winner, born this day in 1917. Died 13 June 2012. The “official” prizes would have meant nothing after that, I’m sure.


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