The ASX 200 is up 5 points at midday. Materials ahead, Banks mostly ↓ ahead of RC finding. HSO recommends Brookfield offer, RWC guidance, House prices down 5.6%yoy. US jobs ahead, RC and earnings next week  #ausbiz



  • Economic data – CoreLogic House prices, AIG Manufacturing Index; CommBank Australia Manufacturing PMI, HIA New Home Sales, PPI
  • Japanese data – Unemployment Rate. Nikkei Manufacturing PMI Final
  • Chinese data – Caixin Manufacturing PMI


  • Europe – Markit Manufacturing PMI Final, Inflation Rate
  • UK – Markit/CIPS Manufacturing PMI
  • US data – Nonfarm Payrolls, Nonfarm Private Payrolls, Average Hourly Earnings, Unemployment Rate, US Average Workweek, Construction Spending, ISM Manufacturing Index, Univ. of Michigan Consumer Sentiment – Final. Expectations are for 165K new jobs (312K previously), average weekly earnings grow of 3.2% (unchanged) and an unemployment rate of 3.9% (Also unchanged)


  • Healthscope (HSO) – Has entered into implementation deed with Brookfield at $2.50. Also news that BGH-AustralianSuper Consortium says it could improve offer if given due diligence.
  • Reliance Worldwide (RWC) – Reaffirmed  FY2019 EBITDA guidance range of $280-$290m. Noted higher percentage of EBITDA expected in 2H (approximately 53%  ‐ 55%) due to the pattern of earnings at John  Guest, the progressive accumulation of synergy benefits and cyclical commodity costs benefiting 2H cost of goods sold. There is an assumption of a modest freeze in the US. If this doesn’t occur on feb-Mar, could reduce earnings by 1.5-3.0%. John Guest integration proceeding well.
  • James Hardie (JHX) – Dr Jack Truong, previously announced as the CEO, successor on 7 September 2018, has been officially appointed as the CEO,
  • Worley Parson (WOR) – Awarded an engineering, procurement and construction management services contract by Newmont Mining in Australia.
  • Wisetech (WTC) – Has acquired Systema AS, a leading customs management solutions provider in Norway. Purchase cost ~$3.0m upfront, with a further expected multi-year earn-out potential of ~$2.7m in relation to business and product integration, and revenue performance. Not material.
  • Ansell (ANN) – Has acquired Ringers Gloves, a leading provider of specialty impact gloves to oil & gas and general industry segments (Texas) for US$70m.




US EQUITIES – S&P 500 +23 (+0.86%), Dow -15 (-0.06%), NASDAQ +99 (+1.37%)

Main themes

  • Continued optimism on earnings (better-than-feared), US-China trade talks and dovish FED.
  • Earnings dominates – Facebook (+10.8) surged, Microsoft (-1.83), Visa (-1.88%), and DowDuPont (-9.23%) underperformed. EUROPEAN MARKETS – Mostly stronger. STOXX500 +0.04%, UK FTSE +0.39%, German DAX -0.08%, French CAC +0.36%.


  • The USD is little changed at FOMC at 95.58.
  • The Aussie dollar is stronger at US72.74c.

BONDS – 2-yr: -7 bps to 2.46%, 3-yr: -7 bps to 2.43%, 5-yr: -6 bps to 2.44%, 10-yr: -6 bps to 2.64%, 30-yr: -5 bps to 3.01%


  • WTI crude futures were down US44c at $53.79, although prices have ended the month up 18% with sanction against Venezuela and OPEC-led production cuts the major supporting factors.
  • Iron Ore – IRESS reports iron ore was up US$6.20 or almost 8% to US$84.50 a tonne. CommSec reports iron ore was up US35c or 0.4% at US$85.40. Overall iron ore is up 13% or so this week on the back of the dam wall failure at Vale’s iron ore mine in Brazil.
  • LME metals – Higher again. Copper +1.42%%, nickel +1.90%, aluminium +0.92%


  • US economic data – Q4 Employment Cost Index 0.7% (consensus 0.8%; prior 0.8%), weekly Initial Claims 253K (consensus 220K; prior 200K), and Continuing Claims 1782K (prior 1713K); January Chicago PMI 56.7 (consensus 58.0; prior 63.8); November New Home Sales 657K (consensus 555K; prior 562K)
  • Chinese Vice Premier Liu He met with President Trump to conclude the second day of trade talks. President Trump tweeted earlier that the Middle Kingdom will need to open its markets to US manufacturing, farming, and other industries in order to reach a deal.
  • Bloomberg reported that around 440 Chinese companies have warned about weakening financial results for 2018.
  • Chinese Manufacturing PMI yesterday 49.5 (expected 49.3)
  • European data – German Retail Sales -4.3% (expected -0.5%; last 1.4%), representing the sharpest rate of decline in 11 years. Italian flash Q4 GDP -0.2% QoQ (expected -0.1%; prior -0.1%), representing the second consecutive quarter of contraction in activity.

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