The ASX 200 is down 42 points (-54 at worst) in mid-morning trade on truth of Trump’s trade tantrum. Gold the sole +ve. Everything else struggling. CSR result, SUN update, FXL humms and BHP legal proceedings. #ausbiz
TODAY
- CSR result
- BoJ Monetary Policy Meeting Minutes
- Japanese data – Nikkei Services PMI
- Chinese data – Balance of Trade, Imports/Exports
TONIGHT
- UK – Halifax House Price Index
- ECB President Draghi Speech
COMPANY NEWS
- CSR – NPAT of $181.7m. Building Products revenue +1.0 to $1.7bn with growth across most products and segments. EBIT of $206.5 million net of $14 million invested in innovation and new building systems to deliver long-term growth. Search for new MD is well underway. Outlook – Building Products – Volumes in the first month of YEM20 remain consistent with the final quarter of YEM19. Mixed economic signals make it difficult to predict building activity levels for the year ahead. CSR is making changes to its operating footprint and overheads to mitigate the impact on earnings. Longer-term, demand for CSR’s building products will be supported by housing activity driven by population growth, high employment and a stable environment for interest rates. Property – Whilst the quantum of earnings may fluctuate due to the timing of transactions, the ongoing development of a number of major projects will underpin Property earnings over the next 10 years. Aluminium – Currently 71% of net aluminium exposure for YEM20 is hedged at an average price of A$2,718 per tonne (excluding ingot premiums) as of 30 April 2019.
- BHP – Notes the media reports today concerning the group claim in the United Kingdom in relation to the Samarco dam failure on 5 November 2015. Confirms that BHP Group Limited and BHP Group Plc have been served with legal proceedings filed in the Business and Property Courts of Liverpool, England and intends to defend the claim
- Suncorp (SUN) – Q update. Total lending portfolio $58.9bn, up 1.0% from March 2018, and down 0.5% from December 2018. growth in the business lending portfolios was offset by a $314 million contraction in home lending, amid increased price-driven competition and a continued credit market slowdown. Townsville flood affected arrears and agribusiness affected by weather events. Tier 1 ratio of 9.1%.
- Flexigroup (FXL) – New offer with consolidation of two legacy platforms – Certegy EziPay and OxiPay to create humm. Accounts for 17% market share of BNPL (Buy Now Pay Later) transaction volume and 40% of receivables. New retailers include Myer, IKEA, JB Hifi New Zealand, Solomon’s Carpets, Strandbags, National Hearing, National Dental Plan and City Fertility and continued business momentum as new partners take total humm retailers to over 13,000
RETAIL SALES DATA
Better than expected. Up 0.3% and the previous month revised up to 0.9% (from 0.8%). Online retail turnover was 5.7% of total turnover, up from 5.1% a year ago. In volume terms, over the Q sales were down 0.1%, following a flat Q volume performance in the Dec Q.
OVERNIGHT
SPI FUTURES -48
US EQUITIES – S&P 500 -48 (-1.65%), Dow -473 (-1.79%), NASDAQ -160 (-1.96%).
Main themes –
Confirmation that US tariffs against Chinese imports worth $200bnwill increase from 10% to 25% before Friday. Trump has also threatened to place a 25% tariff on another $325bn of Chinese imports.
EUROPEAN MARKETS – Lower. STOXX600 -1.37%, UK FTSE -1.63%, German DAX -1.58%, French CAC -1.60%
CURRENCIES
- The USD is stronger at 97.55
- The Aussie dollar has settled down at 70.15c after reaching a high of US70.48c after the RBA decision yesterday. The low yesterday was US69.81c.
BONDS – 2-yr: -3 bps to 2.28%, 3-yr: -4 bps to 2.24%, 5-yr: -4 bps to 2.25%, 10-yr: -5 bps to 2.45%, 30-yr: -5 bps to 2.86%
COMMODITIES
- Oil – WTI futures dropped US85c or 1.4% at US$61.40 a barrel on Trump’s comments.
- Gold futures settled up US$1.80 at US$1,285.60 an ounce.
- Iron Ore – IRESS has the iron ore price up US$1 at US$97.50 a tonne. CommSec has iron ore up US$2.60 or 2.8% to S$95.70 a tonne.
- LME metals – Mixed. Cu -1.29%, Ni -1.10%, Al +1.14%
ECONOMIC DATA, NEWS & POLITICS
- US Economic data – JOLTS — Job Openings 7.488m (prior 7.142m
- Trade war – UBS analysis says full-blown trade war (low probability) will take 45bp off global growth and 1.2-1.5% off Chinese growth.
- Fed Speak – Dallas Fed President (non-voter) Robert Kaplan expects the US economy to remain healthy and he does not see a downturn on the horizon.
- Chinese trade talks – China’s Ministry of Commerce confirmed that Vice Premier Liu He will attend talks this week, but only Thursday and Friday (was Wed-Sat previously).
- Brexit – EU Brexit negotiator Michel Barnier said the EU is willing to revise the Brexit blueprint and that cancelling Brexit altogether is still an option for the UK.
- European data – German Factory Orders +0.6% (expected 1.6%; last -4.0%)
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