The ASX 200 is down 23 points in mid-morning trade. Election fails to excite. Banks a drag (franking cash refunds perhaps?), REITS ↑ (ditto) and consumer sectors also good.  IAG proceedings, BOQ cuts div, CIM AGM. Global central banks on hold forever. Chinese CPI ahead #ausbiz


  • Chinese data – Inflation Rate, PPI


  • US economic data – Initial Claims, Continuing Claims, PPI
  • US earnings – Rite Aid (RAD), Fastenal (FAST). Tomorrow night JPMorgan Chase (JPM), Wells Fargo (WFC)


  • Bank of Queensland (BOQ) – Results. Cash earnings after tax of $167 million, down 8%; Statutory net profit after tax of $156 million, down 10%; Net Interest Margin down 3 basis points to 1.94%; Cost to Income ratio up 190 bps to 49.5%; Operating expense growth of 2%; Loan Impairment Expense of $30 million or 13 basis points of gross loans; Common Equity Tier 1 (CET1) capital ratio of 9.26%; Basic earnings per share down 10% to 41.8 cents; Return on average ordinary equity down 110 bps to 8.8%; Fully franked interim dividend of 34 (down 4 cents). Citing difficult conditions in the banking sector in general, including Royal Commission. 2H earnings likely to to improve. “Although the current earnings profile is not at the level that we aspire to, there is a lot to be optimistic about in terms of the progress made through the niche strategy, Virgin Money Australia, and the opportunity of reinvigorating the retail banking business in the coming 12 months,”
  • Ausdrill (ASL) – Will sell its hydrogeological drilling assets for $16m.
  • Qantas (QAN) – Alison Webster has resigned as CEO of Qantas International. Mr Narendra Kumar, former CFO of Qantas International and currently overseeing planning for key changes to the airline’s long-haul fleet, will act in the role of Qantas International CEO until a permanent appointment is made
  • Amcor (AMC) – Amcor and Bemis Company announced that In relation to their all-stock transaction. Unconditional antitrust clearance with no remedial action has been received from the Brazilian Administrative Council for Economic Defense (CADE).
  • Whitehaven Coal (WHC) – March Q production report
  • Cimic Group (CIM) – AGM.


The housing subindices in the Westpac consumer confidence numbers out today are fantastic. The house price expectations number up 11.9% (although still down 27% over the year) but people increasingly comfortable in buying a house…

This is the commentary from Westpac: “Sentiment around housing improved in April. The ‘time to buy a dwelling’ index rose a further 2.4% to 119.4 in April, a four year high. The index has now risen 33% from its mid-2017 low and is back around its long run average of 120. Improving affordability continues to see a lift in buyer sentiment in NSW and Victoria although in both cases there is still some way to go before buyer sentiment returns to long run average levels.

More surprisingly, the Westpac-Melbourne Institute Index of House Price Expectations posted a strong 11.9% rise to 95.6 in April, boosted by a sharp increase in New South Wales. The Index is coming off a March reading that was the lowest level since we began compiling this index in 2009.”





US EQUITIES – S&P 500 +10 (+0.35%), Dow +7 (+0.03%), NASDAQ +55 (+0.69%)

Main themes

  • Core CPI for March moderated on a year-over-year basis, although monthly number exceeded expectations.


  • No surprises in Fed minutes; committee will remain patient and data-dependent
  • US China trade – agreed on a mechanism

EUROPEAN MARKETS – Mixed. STOXX600 +0.26%, UK FTSE -0.05%, German DAX +0.47%, French CAC +0.25%.


  • The USD is weaker at 96.93
  • The Aussie dollar is stronger at US71.71.

BONDS – 2-yr: -2 bps to 2.32%, 3-yr: -1 bp to 2.29%, 5-yr: -2 bps to 2.30%, 10-yr: -2 bps to 2.48%, 30-yr: -1 bp to 2.90%


  • Oil – WTI futures closed up US64c or 1% to US$64.64 to a 5 month high. Inventories rose more than expected +7mb (exp 2.3mb) but there was a draw in gasoline. OPEC monthly production report showed Venzuela’s output fell below 1mbpd, a long term low.
  • Gold futures on the highs of the week, up US$5.60 to US$1,313.90/oz
  • Iron Ore – IRESS reports that iron ore was up US2 at US$96.50. CommSec reports iron ore was 90c 65 or 1.0% to U$94.30.
  • LME metals – Mixed. Copper -0.34%, nickel -0.23%, aluminium -0.61%


  • US economic data – MBA Mortgage Index -5.6% (prior 18.6%); March CPI 0.4% (consensus 0.3%; prior 0.2%) and core CPI 0.1% (consensus 0.2%; prior 0.1%). Core inflation moderated to 2.0% yoy from 2.1% in February, which is a trend that should keep the Federal Reserve on hold.
  • ECB – Rates kept on hold. Draghi notes risks were tilted to the downside
  • Major US bank CEOs are testifying on the state of the industry
  • Japanese economic data – February Core Machinery Orders +1.8% (expected 2.5%; last -5.4%), but -5.5%yoy (expected -5.2%; last -2.9%). March Machine Tool Orders -28.5%yoy (last -29.3%)
  • Brexit – The European Union will reportedly grant a conditional extension of Article 50 to British Prime Minister Theresa May at today’s summit of EU leaders. European Council President Donald Tusk has said the EU should consider offering the UK a “flexible” delay to Brexit of up to a year.
  • European economic data much better than expected – UK GDP +0.2% (as expected, last 0.5%) to be +2.0%yoy (expected 1.7%; last 1.5%). February Construction Output +0.4% (expected -0.2%; last 3.5%) and +3.3%yoy (expected 2.4%; last 2.2%). February Industrial Production +0.6% (expected 0.1%; last 0.7%) or +0.1%yoy (expected -0.9%; last -0.3%). French Industrial Production +0.4% (expected -0.5%; last 1.2%); Italian Industrial Production +0.8% m/m (expected -0.5%; last 1.9%) and 0.9%yoy (expected -0.9%; last -0.8%)
  • FOMC Minutes – Some policymakers under certain circumstances could “judge it appropriate to raise the target range for the federal funds rate modestly later this year.”. Others were mixed “Several participants noted that their views of the appropriate range for the federal funds rate could shift in either direction”. Summarising “A majority of participants expected that the evolution of the economic outlook and risks to the outlook would likely warrant leaving the target range unchanged for the remainder of the year.”

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