The ASX 200 is up 40 points in mid morning trade after some great PMI numbers in China and US ISM. Gold not shining, IT and H/care best. IPL downdate, FMG Iron Bridge approved, SEK gets Narev and CCP oversubscribed. Big day with RBA and budget. #ausbiz
TODAY
- Economic data – Building Permits
- RBA Interest Rate Decision
- Ex-dividend – Adelaide Brighton (ABC) 15.0c, Adairs (ADH) 6.5c, Freedom Foods Group (FNP) 2.3c, Joyce Corporation (JYC) 5.0c
TONIGHT
- UK data – Construction PMI MAR
- European data – PPI, Unemployment Rate
COMPANY NEWS
- BHP Billiton (BHP) – WA Iron Ore update. BHP Port and Rail Operations in Port Hedland, WA is ramping-up after being suspended due to Tropical Cyclone Veronica. Initial inspections show no major damage but isolated flooding both on site and sections of the rail leading into the port has limited train movements. Port is currently operating at reduced rates and not expected to return to full capacity until later this month. The preliminary estimate is 6-8mt impact and 2019FY production and unit cost guidance are currently under review.
- Incitec Pivot (IPL) – 1H update. 1H distribution sales currently down approximately 200,000 tonnes on pcpc and unlikely any substantial recovery of those lost volumes in 2H. The impact of these lower volumes on first half FY19 EBIT is expected to be approximately A$20M. The financial impact of the QLD rail outage on first half EBIT is expected to be approximately A$60M, with the total impact for the 2019 financial year now anticipated to be around the lower end (A$100M) of the range previously announced. Portland SSP manufacturing facility will close in May 2019 and operations will be consolidated to the Geelong SSP manufacturing facility. Costs of $13m in the FY19 results and synergies of A$3M EBIT per annum and a sustenance capital saving of approximately A$1M per annum, both from FY20. Re Louisiana Ammonia plant. Earlier issues mitigated and will be permanently repaired in the next turnaround. But further issues with compressor electronic controls. Estimated EBIT for the Louisiana Ammonia plant for the first half of FY19 is approximately A$14M (US$10M) compared to A$62M (US$48M) in the pcp.
- Seek (SEK) – Ian Narev appointed as Group Chief Operating Officer and Asia Pacific & Americas CEO.
- Credit Corp (CCP) – Placement increased to $125m as a result of strong demand.
- Fortescue Metals Group (FMG) – US$2.6 billion Iron Bridge Magnetite Project approved
OVERNIGHT
SPI FUTURES +36
US EQUITIES – S&P 500 +33 (+1.16%), Dow +330 (+1.27%), NASDAQ +100 (+1.29%)
Main themes
- Growth signals more positive – Chinese PMI numbers, strong ISM number.
- February retail sales missed expectations, but the January number was revised up
- Cyclical sectors did well, oil stronger
- Trade talks continuing – Washington saying the negotiations were “candid and constructive” as the world’s two largest economies try to resolve their trade war
EUROPEAN MARKETS – All positive. STOXX600 +1.21%, UK FTSE +0.52%, German DAX +1.35%, French CAC +1.03%.
CURRENCIES
- The USD is stronger at 97.38
- The Aussie dollar is stronger at US71.10.
BONDS – The 3mo-10Yr spread has widened back out to ten basis points after inverting by seven basis points as of last Wednesday’s close. 3-mo: unch at 2.39%, 2-yr: +6 bps to 2.33%, 3-yr: +8 bps to 2.29%, 5-yr: +7 bps to 2.31%, 10-yr: +8 bps to 2.49%, 30-yr: +7 bps to 2.89%
COMMODITIES
- Oil – WTI futures rose $1.45 or 2.4% to US$61.59 a barrel, almost a five month high
- Gold futures settled down $4.30 at $1,294.20
- Iron Ore – IRESS reports that iron ore was unchanged at $86.500. CommSec reports iron ore was up US85c or 1.0% to U$87.90.
- LME metals – Mixed. Copper -0.24%, nickel +0.89%, aluminium -1.05%
ECONOMIC DATA, NEWS & POLITICS
- US economic data – Retail Sales -0.2% (consensus +0.2%; Prior revised to +0.7% from +0.2%); Retail Sales, Ex-Auto -0.4% (, Briefing.com consensus +0.3%; Prior revised to +1.4% from +0.9%); Business Inventories for January (consensus +0.5%; Prior revised to +0.8% from +0.6%); ISM Manufacturing Index for March 55.3 (consensus 54.1; Prior 54.2); Construction Spending for February +1.0% (consensus -0.3%; Prior revised to +2.5% from +1.3%)
- Chinese Manufacturing PMIs for March are better than expected and above 50.0, signalling expansion.
- Easyjet (-8.5%) after saying Brexit uncertainty was leading to softer ticket pricing and the outlook for 2H was “more cautious”.
- UK lawmakers will again vote on a number of alternative options – similar to last wee but now down to 4
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